Credit Cards: Popularity & Problems
By Samarth Singh
In today’s world, credit cards and buy-now-pay-later schemes are becoming much more common. As per data from forbes.com, about 36% of Americans use virtual and physical credit cards as their primary mode of payment.
Credit cards are not only popular among adults, but also among youth:
52% of high school students hold a credit card
76% of high school graduates use a credit card
96% of college graduates have a credit card
When checked by family income:
54% of families with an annual income of less than USD 25000 have a credit card
84% of families with income between USD 25,000 and USD 50000 have a credit card
What’s more is that several people have more than one credit card:
The average number of credit cards for Generation Z (18-23 years) is about 1.91
The average number of credit cards for Millennials (24-39 years) is about 3.18
The average number of credit cards for Generation X (40-55 years) is about 4.23
It is an almost indisputable fact that credit cards are very popular. In several cases, it is a good thing. The problem is not having credit cards. It’s credit debt.
As per a survey in 2023,
50% of Americans are very confident about paying their credit card bills
20% of Americans are somewhat confident about the same
8% are neither confident nor unconfident
8% are somewhat unconfident
14% are very unconfident
About half the credit card users are not completely sure about their credit card payments. The same survey also found out that only about 46% of Gen Z credit card holders are likely to know about their Credit Card Interest rates. This is the lowest rate among all age groups.
The problem is becoming much more evident as well. According to a Business Insider report in 2023, the percentage of credit card payments due rose to 3.7% in the third quarter of 2022. Between the September and July of 2022, the US Credit Card debt raised to 38 Billion Dollars. The biggest increase in debt came from Gen Z, whose 90+ Day Credit Card Delinquency Rate increased to 6%.
The problem is not the existence of credit cards. It’s how they are used. Small steps like making a simple budget can reduce overspending by a lot – and that is exactly what we need to do.
Sources:
Pokora, Becky. “Credit Card Statistics And Trends 2023.”
Forbes Advisor, March 9, 2023. https://www.forbes.com/advisor/credit-cards/credit-card-
statistics/
Bienasz, Gabrielle. “'Is This a Sign of Trouble Ahead?': Gen Z Is Missing Credit Card Payments, Running Up Debt
Entrepreneur, November 23, 2022.” https://www.entrepreneur.com/business-news/a-new-
report-says-gen-z-is-loading-up-on-credit-card-debt/439789
Zinkula, Jacob. “Gen Z’s Finances Are Already Tanking, and We’re Not Even in a Recession
Yet.” Business Insider, July 13, 2023. https://www.businessinsider.com/recession-could-hurt-
gen-z-finances-getting-worse-debt-inflation-2022-
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