Credit Cards Credit Card Basics

How Much Credit Card Debt Is Too Much?

Carrying any debt on a credit card is costly, but if you are struggling to make payments or feeling stressed, then you may have a big problem with your level of debt.

By Christy Rakoczy

Edited by Steve Miller

Updated Jan. 20, 2026

Credit cards can be a really helpful financial tool. You can use them to earn rewards for purchases, to take advantage of the buyer protections they offer, and to build credit.

Unfortunately, credit cards can also get you into big financial trouble. High interest rates coupled with the temptation of only making minimum payments on your balance can trap you under a pile of debt if you're not careful.

Ideally, you'll be able to pay off your credit card statement in full and avoid carrying a balance month to month. But in today's increasingly expensive world, we know that's not possible for everyone all the time. So, how much credit card debt is too much?

How much credit card debt is too much?

To be blunt, any credit card debt you can't pay back before interest kicks in is too much. As of August 25, 2025, the average credit card interest rate was 21.39%. Paying interest at rates this high is not good for your finances.

Ideally, you should make sure you're not charging more to your card than you can pay back at the end of each billing cycle.

Of course, this isn't always realistic. Some people do have credit card debt. If you're worried about whether your balance is out of control, then these red flags suggest you may have a problem.

You're struggling to make the payments.
The debt is causing you stress.
You don't have enough money to accomplish other things after making debt payments.
You're using more than 30% of your available credit (this level of credit utilization can hurt your credit score, but more on that below).

Carrying credit card debt can also impact other borrowing, such as getting a home loan. Most lenders want to see your debt-to-income ratio, including your mortgage payment, car loans, and credit cards, below 36% of your income.

If your credit card debt is so high that you can't meet this metric, that's another red flag that you're too deeply in debt.

Average household credit card debt

If you're feeling the strain of your credit card debt, just know you're not alone.

To provide a point of comparison, as of the third quarter of 2025, Americans collectively owed $1.23 trillion on credit cards, which the Federal Reserve reported was a $24 billion increase compared with the prior quarter.

Experian data reveals that consumers overall had an average balance of $6,735 as of June 2025. However, debt varied by generation.

The average Gen Xer carried $9,600 in credit card debt compared with an average of $3,445 for the Silent Generation and $3,493 for Gen Z. Millennials and Baby Boomers were in the middle with $6,961 and $6,795 of debt, respectively.

That should give you an idea of where you stand compared to others. Remember, though, your finances may look different. Having $5,000 in credit card debt when you make $25,000 a year is not the same as having $5,000 in credit card debt when you make $100,000.

You need to think about the impact of your debt on your own life to decide how much is too much.

Credit limits and your credit utilization ratio

One way to tell if you're too deeply into debt is when your credit utilization ratio is high enough to hurt your credit score.

Your credit utilization ratio is the ratio of the credit you have used relative to the total amount of credit that is available for you to use. For example, if you have a $1,000 balance on a card with a $5,000 limit, you would calculate your utilization ratio with the following calculation:

$1,000 balance / $5,000 limit = .20 or 20%

Typically, if your credit utilization ratio is above 30%, your credit score will suffer because you're using too much of your available credit. Lenders want to see that you don't take on more debt than you can manage.

Paying down debt is the best way to deal with this. However, you can also improve your ratio by requesting a higher credit card limit if your card issuer allows it. If you owe $1,000 on a card with a $5,000 limit and your credit limit is raised to $10,000, your ratio goes down to 10%.

Just don't ask your creditor for a higher limit if you don't think you can use that additional credit responsibly.

Signs of Too Much Credit Card Debt

You can only afford to pay the minimum. If you pay only the minimum, you could be trapped in debt for decades as the minimum mostly just covers interest. Your principal payment won't go down each month.
You struggle to make payments. If you struggle to make payments, including being late or missing payments, this is a major red flag. One missed payment could reduce your score by over 100 points even if you had good credit in the past.
You're using cash advances frequently. Cash advances have upfront fees that usually total 3% to 5%, and the APR is usually higher on cash advances. Using a credit card cash advance at all is a sign that you're relying on your cards too much.
You are stressed about your credit cards. If thinking about your credit card balance makes you cringe, that's a good sign you've got too much debt looming over you.
You can't afford to save for retirement or other goals. If paying down your credit card debt is eating up so much of your money that you can't work toward any other financial goals, you have too much of it.

What to do about credit card debt

So, what should you do if you decide that you do have too much credit card debt? You've got a few options for tackling the problem head-on.

Balance transfer cards

Balance transfer credit cards can be a good way to manage your credit card debt because you can use them to consolidate debt and lower your rate.

Many balance transfer cards offer a 0% APR for a period of time after transferring a balance, often 12 or 18 months. While you usually have a 3% to 5% upfront fee to pay, avoiding interest for as long as possible using cards with a longer 0% intro APR period means more of your money can go to paying down the principal and getting out of debt faster.

Debt consolidation loans

Debt consolidation loans are personal loans you use to pay off one or more credit cards. If you qualify for a personal loan at a lower rate than your cards offer, you can reduce the cost of debt payback.

Your consolidation loan will also have a fixed rate and a scheduled payoff time, so you'll know when you can become totally debt free and how much it will cost you.

Check out loan options from the best debt consolidation companies to see if there is an affordable loan that you could use to make paying off your cards much easier.

Debt settlement

Debt settlement is a last resort to consider when you don't think you can pay off all the debt you currently have. If you settle your debt, your creditors agree to accept less than the full balance due. You usually make a lump sum payment to your creditor for the amount you're settling for.

This can hurt your credit score, and your creditors usually won't agree unless you are behind on payments and they fear you'll pay nothing at all. But it's still worth exploring if you're struggling because you can deal with your debt for good and start working on improving your finances and credit score in the future.

It's also a cheaper, more private, and better alternative to bankruptcy when possible.

FAQs

Is $20,000 in credit card debt a lot?

A $20,000 credit card balance is a large balance and a lot of debt. Owing this much means you owe roughly three times what the typical household does. Because credit card interest rates are very high, your monthly payments and total costs of payoff will also be high. You should explore options like a balance transfer, personal loan, or debt settlement to manage your debt.

Is $10,000 in credit card debt bad?

Carrying a credit card balance of $10,000 can be expensive and interfere with your financial goals. While owing $10,000 isn't ideal, you do have options. You should try to create a debt payoff plan and look into solutions like balance transfers, debt consolidation, or debt settlement to try to pay your balance down.

What is the credit card limit for a $70,000 salary?

Your credit card limit varies based on many factors beyond salary. Creditors consider how much other debt you have and your credit score as well as your income when deciding how high of a credit limit to offer you.

Bottom line

If you've got nagging feelings of concern about the level of credit card debt you've taken on, that's probably a sign that it's time to do something about it.

Debt consolidation and debt settlement are options worth considering if you have truly unmanageable levels of credit card debt, but checking out our list of the best balance transfer cards would be a good place to start if getting a little break from making payments against interest is all you need to get things under control.

If you need help wrangling more significant balances, check out our list of high-limit balance transfer cards.

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