48% of Credit Cardholders Carry Debt from Month to Month

Almost half of credit cardholders (48%) carry debt from month to month, according to a new survey by Bankrate, a factor when it comes to banking as it impacts credit scores and consumer sentiment.

This is down slightly from 50% in mid-2024 but up from 39% in late 2021.

Additionally, just over half of those carrying credit card debt (53%) have been in debt for at least a year, down from 60% in mid 2024 but up from 50% in late 2021.

Among credit card debtors, 47% say the primary cause was an emergency/unexpected expense, which includes medical bills (15%), car repairs (9%), home repairs (7%) and other emergency/unexpected expenses (16%).

The second-most common reason for carrying a balance is day-to-day expenses (28%; e.g., groceries, childcare and utilities), followed by retail purchases (11%; e.g., clothing and electronics) and vacation/entertainment expenses (9%).

Of those carrying balances, 3 in 10 (30%) expect to pay off their credit card debt within a year, while 41% expect to pay it off between 1 and 5 years from now.

In total, almost three-quarters (71%) of credit card debtors expect to have it paid off within 5 years.

Conversely, over 1 in 10 credit card debtors (13%) expect it will take more than a decade, including 6% who say they expect to never get out of credit card debt.

Although lower-income cardholders are more likely to carry debt from month to month, higher-income households with credit card debt are more likely to have long-term debt.

Some 54% of cardholders with annual household incomes under $50,000 carry credit card debt from month to month, versus 41% of cardholders who earn $100,000 or more annually.

But 59% of credit card debtors in the $100,000+ income bracket have been in credit card debt for at least a year, including 24% who have been in credit card debt for at least five years.

Only 51% of credit card debtors who earn less than $50,000 annually have been in credit card debt for a year or more.