A recent survey found that 37% of credit card holders have recently missed making timely payments.

Paying your credit card balance on time every month is one of the best ways to protect or improve your credit score. However, not everyone is able to do so regularly, even if they are willing.

72ab608483a7f59489a975b33dfc758bIn fact, a survey conducted by CardRates.com recently interviewed 1,055 individuals, with 37.7% stating that they had delayed at least one credit card payment recently. The reason? Unpredictable economic conditions, including soaring inflation and rising interest rates.

Rising inflation means consumers are paying more for the same goods and services they used to get for less money. This has put pressure on their household budgets, including their credit card debt payments.

The Consumer Price Index (CPI) is a commonly used measure of inflation. After averaging annual growth rates well below 3% for over a decade, the CPI spiked to 4.2% in April 2021, then soared to a peak of 9.1% in June 2022, before gradually easing to 3.7% in September (still elevated).

Interest rates affect what consumers pay for various types of loans, including credit card debt.

The federal funds rate, set by the Federal Reserve, is a common benchmark for measuring interest rates. This rate, which was near zero at the start of the COVID-19 pandemic emergency in 2020, climbed to 5% by June.

Other reasons for cardholders falling behind

Inflation and interest rates aren’t the only reasons consumers struggle to make timely credit card payments. Increased spending and rising overall debt levels could also be contributing factors.

The New York Fed’s January Consumer Expectations Household Spending Survey found an increase in spending.

The report found that monthly household spending growth slowed toward the end of 2022, but the rate of growth remained positive. The New York Fed further noted that the rate of spending growth was still well above pre-COVID-19 pandemic levels.

In its latest survey, the New York Fed found a significant increase in monthly household spending in August. This trend was most pronounced among those under 40, those with high school education or less, and those with household incomes under $50,000.

Meanwhile, the report noted that the proportion of households making at least one major purchase in August soared to 63.5%, the highest level since August 2015.

The rise in consumer debt also featured in the New York Fed’s Quarterly Report on Household Debt and Credit for the second quarter of 2023. The report revealed that total household debt rose to $17.06 trillion, an increase of $160 billion. Credit card balances within the period rose to $1.03 trillion, up $45 billion, a 4.6% increase.

With the increase in debt, the total number of consumer credit card accounts also rose. Over 5.4 million new accounts were added in the second quarter, bringing the total number of accounts to over 578 million. The total credit limit for all these accounts increased to $4.6 trillion.

The report noted that while overall consumer debt delinquency rates remained relatively low, credit card late payments increased significantly in the second quarter.

Nearly half of cardholders surveyed didn’t know their rate

Another finding from CardRates.com’s survey was that 45.2% of consumers didn’t know the interest rate they were paying on their card balance.

For those carrying a balance each month, this rate determines the interest charges they pay each month. Carrying a balance is not uncommon and may be more prevalent among consumers facing other financial challenges.

A survey released by JD Power on August 17 found that just over half of U.S. credit card customers carry a balance. This proportion jumps to 69% for those considered “financially unhealthy,” defined by a combination of indicators including expenditure-to-savings ratio, credit score, and coverage in safety net items like insurance.

Actual rates consumers pay on card debt vary. However, one thing is certain: average credit card annual percentage rates (APR) have risen sharply in the last five years.

According to Federal Reserve data, the average APR for all credit card plans was 14.22% in 2018. This rate remained relatively stable in 2019, 2020, and 2021, before sharply rising to 19.07% in 2022. In the first and second quarters, the average APR rose to 20.09% and 20.68%, respectively.

For accounts charging interest, the annual rate rose from 16% in 2018 to 20.40% in the fourth quarter of 2021, then jumped to 22.77% in August.

Rewards incentive consumers to choose card shopping

Despite the increase in card accounts, our survey found that 40% of consumers have only one card, 27% have just two cards. Fifteen percent said they have three cards; 7% said they have four, and 5% said they have five. Only 4% said they have between six and nine cards, while just 1.5% said they have ten or more cards.

For many people, one card may be enough. For others, this could mean missing out on opportunities for more extensive rewards, such as cashback, airline miles, hotel stays, gasoline rebates, or shopping points. Mixing different reward cards may be a good strategy for maximizing rewards.

Credit card rewards hold a special place in consumers’ hearts. CardRates.com’s survey found that rewards are the primary reason consumers choose to use a specific card for shopping. (Other survey options included purchase amounts, payment due dates, and frequency of specific types of purchases.)

Tips for making on-time card payments

  1. Know when your payment is due

Making on-time payments doesn’t necessarily mean you have to send funds immediately after receiving your statement. For most cards, you can wait a week or two before making a payment without any negative consequences. This is because most credit cards have a grace period during which you can pay later but still make an on-time payment.

This grace period is typically 21 days but can vary. Your actual payment due date should be printed on your card statement.

  1. Always pay at least the minimum amount

Many cards have a minimum payment option. This amount is usually too low to pay your monthly interest charges and reduce your balance for the month, but it can be helpful if you need temporary relief.

Other options—delaying or missing payments—may result in higher rates or late fees and lower your credit score.

  1. Accept balance transfer offers

Balance transfer offers allow you to move all or part of your card balance from one card to another. The advantage is that the rate for balances transferred can be much lower, even 0%, for up to a year or longer.

If the rate is lower, your minimum payment amount should be lower, which can help you make on-time payments. Lower rates may also apply to new purchases made with the card. Most balance transfers charge a fee, typically 3% to 5% of the transfer amount.


While some consumers face unique financial challenges, most can use simple strategies to improve their on-time payment habits. Using grace periods, minimum payment amounts, and balance transfer offers strategically can help consumers avoid missing payments and lower their rates.

Leave a Reply

Your email address will not be published. Required fields are marked *