Average American household credit card debt now
Credit card debt is reaching record levels, with day-to-day expenses fueling the problem.
Credit card debt is reaching dangerously high levels for millions of Americans. As Forbes reports, the average American household now has $16,425 in unpaid credit card bills, which is a 10 percent increase from 2013’s figures and is at a level that has not been seen since the Great Recession. Furthermore, the high credit card debt load is a sign not that Americans are being more frivolous with their money, but that they are relying on credit cards to simply get by. Another study found that day-to-day necessities are what is driving up credit card debt, thus indicating that more consumers are struggling financially with bills and the high cost of living.
Credit card debt keeps rising
In total, Americans hold close to $1 trillion in credit card debt and that level is rising quickly. In May 2017 it was found that credit card debt had risen by six percent in just one year and that overall credit card debt levels were at their highest since the Great Recession began in 2008.
Furthermore, American households are spending thousands of dollars just trying to keep up with interest payments on those credit cards. The average interest rate on credit card debt is 18.76 percent, which results in the average household paying $1,292 just in interest each year. On the bright side, 60 percent of households either do pay off their credit cards each month or don’t have a credit card at all. However, that only further suggests that the remaining 40 percent of households are especially struggling to keep up with their credit card bills.
Carrying credit card debt
In fact, another study shows just how difficult the situation with credit cards has become for millions of Americans. As Fox Business reports, nearly half of people who have credit card debt have been carrying that debt for at least the past two years. Those aged 63 to 71 were the most likely to be carrying long-term credit card debt at 63 percent, while 57 percent of those aged 72 and over were carrying a credit card balance for at least two years.
Day-to-day expenses, such as groceries, heating, childcare, and utilities, were the most commonly cited reasons for the debt. Interestingly, the study also found that higher income and better educated Americans were more likely to be carrying credit card debt than those with lower income and lower educational levels were.
Drowning in debt?
When people are struggling with debt, credit cards are often just one piece of the problem. Medical debt, auto loans, mortgages, and student debt can all combine with credit cards to make one’s debt levels unsustainable. Instead of drowning in that debt and trying to make minimum payments that mostly only go towards interest, those struggling financially may want to consider talking to a bankruptcy attorney. An experienced attorney can show individuals how personal bankruptcy can help them discharge certain debts and give them the breathing room they need to get back on their financial feet faster.