It’s a meaningless metric, as described. I have balances in the tens of thousands on many credit cards, but they’re always paid before interest applies. It’s just an interest free loan for me that offers cash back, ability to dispute payments, and other perks.
What would be interesting is median and mean average of interest accruing credit card debt.
I think your use of credit cards is atypical. How long until your cards accrue interest? If it's greater than 30 days, that's probably the result of more disciplined debt management.
There's some attempt to compare those who carry a balance vs those who pay in full:
All cards are pretty much the same in my experience, they have monthly billing cycles, and after the end of the cycle you have roughly 20 to 25 days to pay before it starts accruing interest.
Your last sentence is what I suspect, that many people don’t pay interest, but those who do might be outliers and have a decent debt burden. The type of person that is okay paying credit card interest rates is probably not going to stop at a few dollars of spending and say it’s enough.
> many people don’t pay interest, but those who do might be outliers and have a decent debt burden
About 38% of US households carry a credit card balance [1], as about 75% of consumers own 1 or more credit cards [2], that puts the number who carry a balance at around 50%.
Thanks for citing the relevant facts. Still, though, you were calling lotsofpulp's CC usage (never carrying a balance) "atypical", but that seems like a non-standard application of the term, i.e. for something half of the relevant population does, you know?
That $6K is the average balance carried forward from one month to the next month (AKA revolving balance), not the balance paid in full [1], so actually its as insane as the parent thought, especially of the median is much higher.
They clarify in paragraph below that the data is from the credit bureaus which incorrectly factor in balances that will get paid off. You have up to 60 days to pay off your credit card debt before it starts accruing interest. It is a debt and counted towards the consumers debt levels even though the consumer could be paying off the debt every cycle. If you use credit card and pay off the card every cycle, you’ll have a revolving debt and you can easily see with credit karma or similar service.
That is average debt for those who have revolving credit card debt. I assume this means if 10 people have credit cards, 9 pay them monthly and don’t accrue interest, but 1 person doesn’t pay and owes $6k, then the average balance carried forward is $6k.
I guess I should add to my original comment that not only are median and mean of interest accruing debt relevant, but what portion of credit card users even have an interest accruing balance.
Wow. That’s insane for an average.