Credit card balances are high in both the United States and Canada.
In the United States, where the Federal Reserve Bank of New York reported total credit card balances exceeded $1 trillion in the second quarter of 2023, the average cardholder had an outstanding debt of $7,279 as of the final month of 2022.
Those figures, courtesy of LendingTree, are significantly higher than the average debt in Canada, where the credit monitoring agency TransUnion reports the average Canadian cardholder had an outstanding credit card balance of $3,909 in the first quarter of 2023.
Interest rates on credit card balances tend to be very high compared to rates on mortgages and automotive loans, and that reality could be one reason why so many consumers are struggling to pay off their credit cards without accruing sizable interest charges.
In fact, a report from Bankrate released in August 2023 indicated that 60 percent of cardholders who were carrying a balance on their credit cards had been in debt for at least a year, a development one Bankrate analyst described as “noticeably worse” than the situation involving credit card debt just a few years prior to the report’s release.
