On average, 50 percent of Americans carry monthly credit card balances. Even worse, the average amount of this credit card debt is $15,654. This is putting a significant financial strain on the American economy and on individuals and their households.
Considering the debt levels, it’s understandable that the average American is paying quite a bit of money every year in interest. Even worse, the situation doesn’t appear to be getting any better. If the Federal Reserve issues a rate increase — as it’s expected to do — the average cost of credit card debt will increase to $919 annually. According to a personal finance writer from NerdWallet, the best way to get out of the credit card debt cycle involves “finding a way to put money toward paying off debt, especially high interest debt.”
On average, credit card debt makes up approximately 6 percent of the total debt for Americans. This amount is higher than it was in the past, largely due to increases in the cost of living. The average cost of living has increased significantly faster than the average growth of income, and this has left many Americans without enough savings. If there is an emergency and no savings, consumers who are short on cash need to turn to their credit cards to make ends meet — and, thus, the debt cycle begins.
If you’re underwater in credit card debt, it could be a sign of the times. Whatever you do, don’t blame yourself or feel guilty about your debt. You can take action through bankruptcy and/or other debt management solutions to get your debt under control fast.
Source: money.cnn.com, “Credit card debt is costing you nearly $1,000 per year,” Anna Bahney, Dec. 13, 2017