We’ve Normalized Credit Card Debt. And That’s a Problem for Financial Wellness

By: Doug Kincaid
July 23, 2025

Over the past few years, employers across the U.S. have increasingly embraced the idea that they should play a role in supporting their employees’ financial wellness. And for good reason: Financial stress is linked to lower productivity, increased absenteeism, and higher turnover.[1]^,[2] It’s also clearly a good thing for the employee, both in the short-term and in the long, as those who are in better financial health are naturally able to save more for retirement.[3]

Of course, much of the recent attention in this space has gone toward student loan assistance. Student loan debt is a major burden for many Americans, particularly younger workers just starting their financial journeys. It makes sense that employers could help workers deal with this debt and gain an advantage in recruiting the next generation of talent.

But if we want to make a real impact on employee financial wellness, we also need to give more attention to another, even more widespread and often more urgent issue: credit card debt.

Why Credit Card Debt Deserves More Attention

We already know how common credit card debt is in America: we’ve now hit over 600 million credit card accounts in this country and have racked up a record setting 1.21 trillion dollars in credit card balances.[4] It’s also well known that credit card financial strain can compound quickly, with average APRs on credit cards now exceeding 20%.

What’s less acknowledged is how stressed America is about its credit card debt. According to Greenwald Research and EBRI’s 2024 Workplace Wellness Survey, of those with problematic debt, credit card debt is by far the biggest reason why. When asked what monthly bills cause the most stress, credit card payments are behind only mortgage payments, groceries, and household utilities (the latter two being common expenditures that wind up on the credit card as well).

Similarly, Edelman Financial Engines’ 2024 Everyday Wealth in America Study found that Americans see credit card debt (vs. other types of debt) as the biggest threat to their ability to build wealth.

Credit card debt is also a problem we neglect until it’s too late. In fact, it’s often the first bill people skip when money gets tight.[5]

And yet, despite all this, credit card debt represents a largely invisible burden—one we’ve come to accept as just part of life in America.

The Dual Problem: Normalized and Stigmatized

The real issue is that credit card debt lives in a strange space: it’s both normalized and stigmatized.

We’ve normalized it by building it into our day-to-day finances. Using credit cards to manage cash flow or cover monthly expenses has become routine, especially amid inflation and rising costs. The headlines blame consumer spending or price spikes but rarely interrogate why so many people rely on revolving debt to get by.

At the same time, we stigmatize it. Unlike student loan debt, which is often framed as a necessary investment in one’s future, credit card debt is seen as a personal failure. Something reckless. Avoidable.

In reality, most people carrying problematic balances aren’t splurging on luxury items. According to the Workplace Wellness Survey, the biggest drivers of credit card debt are groceries, car repairs, utilities, and household necessities.

The shame people feel about credit card debt keeps them from asking for help—and keeps employers and institutions from offering it.

Tackling the Issue

It’s time for employers, and the broader financial industry, to step up to provide creative solutions to help address the country’s credit card debt crisis. And in this case, “creative” isn’t just a buzzword. We need genuinely new approaches to tackle a challenge that is so deeply embedded into everyday money management and heavily stigmatized at the same time.

For instance, perhaps employers could implement opt-out automatic payroll deductions to funnel money into high-yield savings accounts (to establish an emergency savings) as well as accounts optimized for typical household spending, with significant rewards for spending on groceries, utilities, and other necessities. Incentivize different money habits.

Or maybe employers could provide one-time “credit reset” bonuses earmarked for paying off high interest balances, available only if employees complete a debt repayment plan. In this case, the pervasiveness of credit card debt works in favor of making this benefit feel equitable, but it would also be easy to similarly reward those who stay debt-free with comparable savings incentives.

If we’re serious about financial wellness, we need to stop ignoring the burdens hiding in plain sight. Let’s build solutions that reflect that and offer a real path forward.

 

 

 

[1] https://www.adp.com/spark/articles/2018/10/whats-on-your-employees-minds-financial-stress-and-workplace-performance.aspx

[2] https://graystone.morganstanley.com/the-parks-group/articles/graystone/thought-leadership/financially-stressed-employees

[3] https://www.tiaa.org/public/pdf/2022_financial_wellness_survey_final_results.pdf

[4] https://www.newyorkfed.org/medialibrary/Interactives/householdcredit/data/pdf/HHDC_2024Q4.pdf

[5] https://libertystreeteconomics.newyorkfed.org/2025/03/when-the-household-pie-shrinks-who-gets-their-slice/