How Does Consumer Credit Card Debt Affect the Economy?

a blackboard that has "economy" written on it ascending upward to towards the right, indicating how the credit card debt affects the economy.

We’re often told a lot of statistics about debt in our economy. For example, it’s said the average consumer owes $9,000 in debt to credit card companies. Unfortunately, these statistics often lack context and end up misleading us about the true impact of consumer credit card debt on our economy.

While the average credit card debt might be around $9,000, the median consumer credit card debt is much lower: $2,200. The median is lower because a lot of consumers (more than 50%) don’t owe any credit card debt at all.

Some economists don’t think this is a good thing. Consumer spending drives our economy forward, and when people aren’t using their credit cards, the economy isn’t growing.

Of course, if everyone follows our advice, there won’t be a problem; we advocate that people use their credit cards, but pay off their balances in full every month. This means no credit card debt dragging individuals down, but plenty of consumer spending and economic activity.

Our recommendation

We don’t think you should use credit cards just because the economy needs to be stimulated, though. We recommend prudent credit card use because it’s good for your individual credit rating. Having a good credit score is crucial to many aspects of modern life, and using credit regularly (and paying off balances in a timely fashion) is the best way to establish a solid credit history.

If you’re someone who simply can’t have a credit card at the ready because you know you’ll max it out and get yourself deep into consumer credit card debt, then you should definitely destroy your cards and not use them. Until you're able to use a credit card the right way, keep that temptation under lock and key. There are other ways to improve your credit history that don’t carry the risk of a tempting credit card.

Since over half of all consumers don’t have any consumer credit card debt, we know it’s possible for the other half to get there as well. Our counselors have been helping consumers like you achieve financial freedom for four decades. Call us for a confidential counseling session that is offered free of charge.

If you need help with credit or debt, or want to learn more about budgeting or personal finance, get started with free, confidential counseling and education right here at Credit.org.

Article written by
Melinda Opperman
Melinda Opperman is an exceptional educator who lives and breathes the creation and implementation of innovative ways to motivate and educate community members and students about financial literacy. Melinda joined credit.org in 2003 and has over two decades of experience in the industry.

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