BACK

Jordan Siemens / DigitalVision / Getty Images

Research and Statistics

Card balances dropped in 2020 for the first time in nine years

Data from Experian show balances fell 14% as consumers spent less and received federal aid amid COVID-19

Summary

While overall balances on mortgages, auto loans, student loans and personal loans all continued their steady climb in 2020, credit card balances dropped, according to Experian.

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

For almost a decade, credit card balances have consistently ticked up, year after year. Until now, that is — and in the middle of a pandemic, no less.

While most other debts grew, card balances shrunk

Credit reporting agency Experian recently released its Consumer Credit Review, based on 2020 Q3 data, and it revealed a bit of a surprise. While the overall balances on mortgages, auto loans, student loans and personal loans all continued their steady climb, credit card balances dropped.

Not only did card balances move downward for the first time since 2011, but they dropped by a substantial 14%.

Mortgages, auto loans and personal loans had edged just slightly higher by the end of 2020’s third quarter, rising a modest 1-2%. Meanwhile, student loan balances saw the biggest increase, jumping 9%.

See related: Credit activity still on the rise since pandemic lows

Only HELOCs joined credit card balances in dropping during 2020, with balances down 7%.

According to Experian data, U.S. cardholders have seen their average balance decrease by $879 in 2020, from $6,194 at the end of 2019 down to $5,315 in 2020 Q3.

Though Covid-19 has wreaked havoc on the economy and on many households’ finances, the mandatory lockdowns and business closures also stunted consumer spending. That combined with economic stimulus measures such as cash payments and debt relief may have contributed to consumers being able to pay down their card balances.

In addition, fewer cardholders are late on their payments. While the share of card accounts that were at least one month past due rose by 3% in 2019, it has dropped by 29% in 2020.

Experian’s analysis is based on aggregated credit report data, with its Q3 report released Jan. 4.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

What’s up next?

In Research and Statistics

What is a pay card?

Payroll cards enable employers pay workers with prepaid debit cards instead of via direct deposit or paper checks. Find out about the pros and cons before you accept a pay card as payment.

See more stories
Credit Card Rate Report
Business
14.16%
Airline
15.46%
Cash Back
16.23%
Reward
15.94%
Student
16.78%

Questions or comments?

Contact us

Editorial corrections policies

Learn more