As families struggle to pay their bills, credit card debt reached a record $930.6 billion at the end of 2022 – an 18.5% spike from a year earlier. According to Trans Union, the average credit card balance rose to $5,805 over that same period.
If your credit card balance exceeds 30% of your available credit, it negatively impacts your credit score.
One of the unintended consequences of increased credit card usage is the surprising and rapid drop in credit scores. In fact, for the first time in over a decade the average FICO score did not increase from the previous year.
– Brett Carter, Fidelity Direct Mortgage