Total Retail Credit Card Debt Increased by 6.5% in 2022

In 2022, retail credit card debt saw a notable increase of 6.5%, rising by $7.3 billion to reach a total of $118.9 billion. This growth, while significant, was not as steep as the increase in traditional credit card debt, which surged by 16% to $910 billion during the same period. The smaller role of retail cards in the economy is evident, as traditional credit card debt and average balances are eight times larger than those of retail store cards. This shift indicates that more consumers are opting for bank-issued credit cards and alternative payment methods like buy now, pay later (BNPL) for their purchases.

Balance Increases Similar Across Credit Scores in 2022

Experian data from the third quarter of 2022 reveals that retail card balances increased uniformly across different credit score ranges. The increases ranged from 4.4% to 7.3%, which is slightly below the 8.2% inflation rate during the same period. This trend highlights that regardless of credit score, consumers were adding to their retail card balances.

Average Retail Card Balance by FICO® Score Range

In 2022, the average retail card balance increased across all FICO® Score ranges:

• Poor (300-579): $1,356 (+7.3%)
• Fair (580-669): $1,693 (+7.3%)
• Good (670-739): $1,718 (+4.4%)
• Very Good (740-799): $894 (+6.6%)
• Exceptional (800-850): $377 (+7.1%)

Average Retail Card Balances Increase Uniformly Across States

In 2022, all 50 states and Washington, D.C., experienced increases in average retail card balances, ranging from 2.3% to 10.1%. Texas had the highest average retail card balance at $1,443, while Hawaii had the lowest at $761. States in the West saw the largest increases, with Maine leading the way with a 10.1% increase.

States With the Largest Increases in Retail Card Balances

• Maine: $970 (+10.1%)
• District of Columbia: $938 (+8.9%)
• Oregon: $864 (+8.8%)
• California: $988 (+8.2%)
• Washington: $939 (+8.1%)
• Utah: $970 (+7.8%)
• New Mexico: $1,170 (+7.3%)

States With the Smallest Increases in Retail Store Card Balances

• South Carolina: $1,186 (+2.3%)
• South Dakota: $821 (+2.8%)
• Mississippi: $1,279 (+3%)
• West Virginia: $1,208 (+3.1%)
• Tennessee: $1,170 (+3.2%)
• North Carolina: $1,172 (+3.2%)
• Arkansas: $1,228 (+3.4%)
• Kentucky: $1,061 (+3.9%)

Younger Generations Add to Their Retail Card Balances, Despite Buy Now, Pay Later

In 2022, younger generations saw the most significant increases in retail card balances, with Generation Z and Millennials experiencing double-digit percentage gains. Generation X had the highest average balances at $1,422, while older generations saw minimal increases.

Average Retail Card Balance by Generation

• Generation Z (18-25): $736 (+11.3%)
• Millennials (26-41): $1,195 (+10.7%)
• Generation X (42-57): $1,422 (+5.8%)
• Baby Boomers (58-76): $1,032 (+2.2%)
• Silent Generation (77+): $541 (+0.5%)

Retail Cards Remain Relevant Despite Alternatives for Consumers

Retail cards have a long history, predating bank-issued credit cards. Department stores offered lines of credit to customers long before the first credit cards were introduced in the 1950s. Despite the rise of alternative payment methods like BNPL and mobile payments, retail cards still play a role in the economy. Retailers like Walmart, Target, Macy’s, and Kohl’s continue to rely on retail cards for a portion of their in-store sales.

However, the rise of online shopping and alternative payment methods has impacted the use of retail cards. E-commerce has grown significantly, now comprising 15% of all retail sales, up from just 1% in 2000. Consumers are increasingly opting for BNPL plans and mobile payments, leaving their retail credit cards at home.

At O1ne Mortgage, we understand the evolving landscape of consumer credit and are here to help you navigate it. Whether you’re looking to consolidate debt, refinance your mortgage, or explore new financing options, our team of experts is ready to assist you. Call us today at 213-732-3074 for personalized mortgage services tailored to your needs.

Methodology: The analysis results provided are based on an Experian-created statistically relevant aggregate sampling of our consumer credit database that may include use of the FICO® Score 8 version. Different sampling parameters may generate different findings compared with other similar analysis. Analyzed credit data did not contain personal identification information. Metro areas group counties and cities into specific geographic areas for population censuses and compilations of related statistical data. FICO® is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.