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Retail Credit Card Debt Trends in 2023

Total Retail Credit Card Debt Increased by 6.7%

In 2023, retail credit card debt saw a significant increase of 6.7%. Despite a reduction in the number of retail credit card accounts, the average balance per account rose from $118.9 billion to $126.9 billion by the end of the third quarter.

Those With Poor Credit Scores Growing Their Balances the Fastest

Consumers with poor credit scores experienced the fastest growth in retail card balances. Higher interest rates on these cards, which often exceed 30%, contributed to this increase. For instance, a $1,600 balance with a 30% APR would result in approximately $270 in interest charges over a year.

Average Retail Card Balances Rose Nationwide

Across the United States, the average retail card balance increased in every state. Texas had the highest average balance, while Hawaii had the lowest. States with robust economic growth, such as Illinois, Massachusetts, and Montana, saw the most significant increases.

Younger Generations Add to Their Retail Card Balances

In 2023, younger generations, particularly Generation Z and Millennials, saw the most significant increases in their retail card balances. However, Generation X still holds the highest average balance at $1,528.

More Consumers Consider Buy Now, Pay Later an Option

With rising interest rates, many consumers are turning to buy now, pay later (BNPL) options. These plans are gaining popularity, especially among high earners and those with fluctuating incomes. BNPL is often used for big-ticket items like home furnishings and vacation packages.

Retail Card Spending Is Much More Modest Than Other Credit Card Spending

Retail card debt, at $127 billion, is significantly smaller than general credit card debt. However, BNPL plans, which collectively amount to about $15 billion, are growing in popularity, particularly among younger consumers.

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