Forbes: Americans paid $104 BILLION in credit card debt interest in the past year

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Credit card debt is not cheap. At 15.5%, the average interest rate is up 300 basis points over the past five years. Despite the increasing cost of credit card debt, American consumers continue to borrow. Total revolving debt is now at $1.04 trillion, surpassing the 2008 peak. MagnifyMoney (where I work) ran the numbers, and credit card borrowers have paid $104 billion in credit card interest and fees over the last twelve months alone. That is up 11% from the prior year, 35% over the last five years and shows no signs of slowing.

Debt will only become more expensive as the Federal Reserve continues to increase interest rates. Most credit card contracts have variable interest rates tied to the prime rate. The prime rate is almost directly correlated to the federal funds rate, as this data from the St. Louis Fed demonstrates. Interest is calculated daily on most credit card contracts, which means that when the Federal Reserve increases its target federal funds rate, people with credit card debt will feel the consequences almost immediately.

https://www.forbes.com/sites/nickclements/2018/08/16/americans-paid-104-billion-in-credit-card-interest/#7aa63f1b611a

[doc03]

1. The average credit card interest rate is 15.5% and I get only .51% interest

on my bank MM account?

[forgotmylogin]

2. I finally finished my credit card debt settlement last month.

Now I only have a car loan, plus rent and insurance and utilities, just using a debit card.

I can't believe as recently as ten years ago I was in so much debt. I never was brave enough to add it all up, but I must have owed at least $60-70k on credit cards.

I consolidated it and paid down about 75% making it 3 years through a 4-year plan, then I couldn't afford it anymore. I was riding a bike to work because I couldn't afford a car. Then three years ago a settlement company started helping me clean the rest up for much less than the remainder I owed.

The only last loose end is I probably have to pay taxes on the debt the last card forgave me by taking a settlement amount, but I literally cannot believe I managed to do it.

My credit score is probably tanked, but I managed to purchase a new car in 2014 with no money down and no trade-in. This happened between the two payment plans, and I think was a good karma reward, because I had to take in my elderly mother and needed reliable transportation to take her to doctors appointments.

[redstateblues]

3. Only Debit cards for me

[Lady_Chat]

4. Before Reagan you could deduct interest on your credit cards

car loans too, but once The Tax Reform Act of 1986 was passed, that ended. Only time you can now deduct interest on a credit card, is if it is used for business related purchases, not personal use. Same with car loans, if it's business related , yes, personal use, no. It's too bad they can't bring that back. Wonder if Democrats could make an issue of that? Would really help a lot of people if interest rates are running into the billions.