Credit Card Debt in America: Nation’s Leading Cause of Stress

how much credit card debt does the average American have?

The credit card nation in America is one of the leading causes of stress and anxiety for millions of people nationally. Credit card debt in America is present in over 40% of households. Most people average five to seven thousand dollars worth of debt in a lifetime. This amount can increase rapidly if you have extremely high-interest rates, which is usually the case. These high-interest rates usually result in a product of poor credit history. To increase this credit score, an individual might get a credit card. Because their credit score is low, due to having no prior credit history, the individual’s card will typically be given a very high-interest rate. With these high rates, if a consumer is unable to make payments, the interest amount can quickly get out of control. This reason alone accounts for a majority of overwhelming credit card debt situations in America.

Everyone from gen-x to the baby boomers has significant credit card debt. Lenders are predatory by nature, and it is always best to limit your spending as much as possible. Moderation is key to avoiding credit card debt. It is when we take advantage of credit that we spend more than we need to. It is only when we gain control of our spending and finances that can we avoid credit card debt in America.

Credit Card Debt US

Credit card debt in America rises every year. This is understandable, as interest rates are also rising. If this trend continues, Americans will suffer from thousands of dollars of debt for years, and it will increase over time. The majority of credit card debt in America is present between 45-54-year-olds. This is because they have the necessary income to manage credit debt. The youngest and the oldest generations are the least likely to have a credit card. Of course, there are exceptions to this credit debt generalization, but the statistics describe the majority of credit card debt in America being consolidated among middle-aged consumers.

Some people consider there to be a crisis in America concerning credit card and other types of debt. The best way to get rid of credit card debt in America is to pay it off. If you were to leave your debt alone, it would increase exponentially. This can be a great burden to your psyche. If you have credit card debt, you most likely have debt in other areas of your life. That means your phone most likely rings non-stop from the collectors, and auto-dialers are constantly calling your phone. Sometimes, even your information can be bargained to a company, allowing your phone number to be sold to the person that offers the right price. Occasionally, the reasons are even more nefarious, and it will be people wanting to record your voice to steal your identity. It is up to you to control all areas of your debt, but credit card debt in America is playing a major role in the financial services, millions of dollars in credit card balances that are unpaid, putting a higher pressure in college students to stay out of debt, pay off the balance either on installments or pay the balance in full.

The number one way to avoid credit card debt in America is to pay what you owe. This means not using credit and waiting until the end of the month to pay your bill. Because odds are, you won’t have the money to pay it all, which leaves the remaining carry a balance to accrue more interest over time. The only way to use a credit card as a tool instead of a recreational spending device is to keep track of your expenses, and ultimately, pay them off. There are many apps that can provide help with this. Some connect to your bank account and track what you spend from there. This will force you to see what you are spending money on and prevent you from making expenses unknowingly. Things like a daily coffee can add up to a substantial sum. Managing debt does not mean suffering, but if you see yourself spending a lot on something that adds up to hundreds of dollars a week, like eating out, there are manageable ways to cut this spending and find affordable alternatives. Pinterest is a great tool when it comes to cutting corners, without cutting quality of life. Another reason to avoid credit card debt in America is that your credit score will go down if you don’t pay your debts.

Another way to avoid credit card debt in America is to pay the high-interest credit cards first. Doing this will prevent those interest rates from increasing exponentially over time. If you do not pay your debt, you do not have to worry about prison. However, you do have to worry about your wages being garnished if you were to be sued.

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Credit Card Debt

You should not feel alone or helpless if you have substantial credit card debt in America. Every month, over 40% of people still have a balance on their cards. Including the people that pay their bill each month, the average person has over 6k in debt. 70 million people carry credit card debt from month to month. It does not have to be this way. Take the simple steps necessary to avoid credit card debt in America. Just beginning to pay towards your finances will ease the financial burden.

One other tip is to check your credit score. Doing this and seeing your debt sources can help you consolidate those additional debts into manageable payments. Something to keep in mind is that credit card debt in America becomes delinquent when a bank reports a missed payment to the credit reporting agencies. This is done when a person has been late on payments for at least 30 days. After 90 days the bank will typically charge the balance.

Last but not least, you can always borrow money from a friend, a family member, or put money up against your car. This is definitely a short term option, but something to consider when things get tough. Family and friends are the best people to provide assistance, and the easiest people to pay back. However, definitely, do not burn bridges, and don’t get mad if they have a limit you weren’t expecting. Any help is better than no help. If you have money from a 401k or an IRA, and you’ve had it for a few years, you can take money out of those accounts as well. The financial penalties for doing this are significant, so don’t resort to this method unless you really need to. We understand that debt is an intimidating part of life that often leaves the consumer feeling absolutely overwhelmed, even hopeless. However, in America today, credit card debt is a massive issue affecting millions of people, and an aspect of the modern economy that needs to be dealt with. Keep moving forward and take these necessary steps to work your way out of credit card debt in America.

Published March 09, 2019; Updated May 23, 2019.