At the end of 2002, American households owed an average balance of $8,940 on all credit cards, up 36% since 1997, and a whopping 173% increase over the past decade. Of the $8,940 that was owed, Americans paid finance charges on an average balance of $7,286. This means the cost of credit card debt for the average household is slightly above $1,000 per year.
The $8,940 in card debt for 2002 compares to $8,234 for 2001, and $7,842 for 2000. This figure is arrived by dividing total credit card debt of $750.9 billion by the 84 million American households that have at least one credit card. (If total credit card debt is divided by all 105 million American households, then the figure becomes $7,151 per household.)
The $750.9 billion in credit card debt that consumers owed at the end of 2002 includes $660.9 billion for bank credit cards (VISA, MasterCard, American Express, and Discover) and $90 billion for retail credit cards (store cards, gas cards, etc). However, not all of the $750.9 billion owed at year-end 2002 incurs finance charges. About 18.5%, or $138.9 billion of this debt was paid off in January. Approximately 39% of American credit cardholders pay-off their credit card balance each month, and an additional 38% make more than the minimum required payment.
Therefore the amount of debt that Americans actually paid interest on at the end of 2002 was $612 billion. Divided by 84 million households, the average credit card debt per household becomes $7,286. Divided by 105 million households, the figure is $5,829 per household.
No matter how you slice or dice it, credit card debt was up 8.5% last year compared to 2001.