Why Americans are carrying an average credit card balance of over $6,200

[Yo_Mama_Been_Loggin]

Americans may have a love-hate relationship with their credit cards, but that’s not preventing them from piling on debt.

The country’s outstanding credit card and other types of revolving debt have jumped almost 20% from a decade ago, reaching an all-time high of about $1.1 trillion, according to a recent study from CompareCards.

The average balance on a credit card is now almost $6,200, and the typical American holds four credit cards, according to the credit bureau Experian. Credit card issuers are also giving Americans more room to run up debt, boosting the typical credit limit by 20% over the last decade to $31,000.

The reasons for the spike in credit card debt are complicated and potentially worrisome, financial experts say. A middle-class lifestyle has become more expensive with the cost of health care and education outpacing wage growth, prompting more households to rely on their cards to cover emergency expenses and daily spending, experts say.

https://www.msn.com/en-us/money/credit/why-americans-are-carrying-an-average-credit-card-balance-of-over-dollar6200/ar-BBZULwE?li=BBnbfcN&ocid=hplocalnews

[redstatebluegirl]

1. It burns me to see them push those things on college students who are already looking at

huge student loan debt. Those parasites are on campus all the time.

[Buckeyeblue]

7. The Card Act keeps college credit cards down.

Anyone under 21 has to demonstrate an ability to pay or have a co-borrower. Not like when I was in college and you could get a credit card with a 2500 line just for being able to breathe.

[Grasswire2]

2. wow

I stopped using any credit thirty years ago. Never looked back and live a simple life.

[Merlot]

8. wow, out of touch.

[Lochloosa]

11. Why? I didn't have a checking, savings or CC from 1984 till 2004.

Simple life.

The only reason I had to get one was to fly and be able to rent a car.

[Grasswire2]

12. I have debit cards, but no credit accounts

Wouldn't a mastercard debit or visa debit card be good enough to rent a car? I used to pay for airline tickets with check. Don't keep a checking account any more.

[Lochloosa]

17. I got married. She insisted.

[NickB79]

19. Debit cards are less secure than credit cards

A scammer with access to your debit card can drain your account with no protection. Most credit cards limit the amount of money you're on the hook for with fraudulent purchases.

If you can control your spending and pay it off each month, credit cards are far superior to debit cards.

[lunatica]

20. That baloney.

If someone uses your debit card illegally you inform the bank and they will look into it and give you back the amount you were scammed.

[KatyMan]

24. True

Even Bank of America keeps a close watch on debits.

[Iggo]

41. They call me every time I buy something expensive with my debit card.

Annoying and reassuring at the same time.

[KatyMan]

49. Agree

I've never had the issues with BoA or Comcast that others have had. Whether I morally approve of them is a different discussion.
Enjoy the rest of your Sunday Iggo!

[marybourg]

38. Meanwhile, there's no money in your checking account.

Poster above is absolutely correct. Credit cards are much safer from outside interference than debit cards. The only danger to credit cards is from you!

[lunatica]

44. No. If anyone tries to empty a checking account the debit is refused

I’ve even had mine refused for purchases that are large and once I had a payment refused because I was in a high crime area getting my tires changed.

[Igel]

45. Coworker a month ago came in to work swearing.

They'd drained her checking account using her debit card info.

They didn't pull one large amount. They pulled multiple smaller amounts.

[lunatica]

46. Perhaps she didn't have a large balance.

My bank has always watched out for me for more than 10 years. It’s not a huge bank though it is in a few states.

[sheshe2]

52. There is a limit per day on transactions.

On mine total purchases is 1005. Debit withdrawal is 500.

[Iggo]

18. Out of credit card debt. (n/t)

[lunatica]

47. Me too.

[lunatica]

21. I stopped 10 years ago

Being able to sleep nights instead of worrying all night has given me a much better life!

[shanti]

23. There's a lot to be said

about living within your means. When I retired, I paid off all my cc and cut them up. It's a damn good feeling!

[PoliticAverse]

3. "The average balance on a credit card is now almost $6,200" - wow, I find that hard to believe. n/t

[mr_lebowski]

9. Yeah, that seems high ... esp. when they add 'the average person has 4'

Which implies the average person has $24,800 in revolving charge card debt. I'd shocked and chagrined if it's that high. And I'm very curious what the 'denominator' is in that equation. Is it 'people who have >0 credit cards', or ... what?

Cause $1,100,000,000,000/$24,800 only comes out to 44M and change. I'd think a lot more than 44M people in the US have >0 credit cards.

[Grasswire2]

13. shocking nt

[magicarpet]

29. It is now common to see CC with a 25% to 30% interest rate.

[Grasswire2]

37. jaw dropping!

What a trap.

[magicarpet]

42. Legalized usury,... Eliz. Warren's pet peeve,... as are pay day lenders @ 300 to 400 % interest rate

[JDC]

4. Scary.

[RANDYWILDMAN]

5. It tell me our economy is not what they say it is...

Wages are and have not been keeping up with inflation. The secret that no one is willing to admit too. The other death grip is not being able to discarge student loans.

If my company can discharge and pay pennies on the dollar to my pension, when they claim bankrupcy, why can't we do the same with student loans.

My wife took 18 years to pay of her state school law loans, her old partner paid off his state school working partime in during law school.

[Merlot]

6. Negative and judgmental framing: "piling on debt" "run up debt"

Makes it sound like people are going on spending sprees instead of trying to make ends meet.

[leftstreet]

54. +1

[Buckeyeblue]

10. The problem is lack of savings

So when unexpected costs come up like car repairs people don't have the money set aside to pay for it. Throw over spending at Christmas and other necessities and suddenly you have a 6k balance.

As my grandpa used to say, "It's not how much you make, it's how much you spend."

[Merlot]

14. Actually, it IS how much you make - if what you make doesn't cover

cost of living there is no way you're going to save any money.

[Initech]

25. This. So much this.

If you spend everything you make and don't save any money, you're gonna have a bad time. Of course I learned that the hard way when I nearly went broke a few years ago. Now I try to save as much as possible with every paycheck. Paying cash for most of your spending is a good way to keep track of what you spend as opposed to using a credit card. Cash is there for a reason.

[abqtommy]

15. Again, inserting the word "some" before "Americans" in your title would make it accurate. Am

I the only American that has NO credit cards and NO credit card debt? I don't think so. I learned that
hard lesson years ago and I learned it well.

[Yo_Mama_Been_Loggin]

39. Not my article

Take it up with the author.

[abqtommy]

40. HaHa. Not so fast. You are responsible for what you post. Now go and sin no more...

[Yo_Mama_Been_Loggin]

48. Okay

Welcome to ignore.

[progree]

16. Up 20% in a decade!!! OMG!!! But, umm, err, uhhh, so is inflation

They didn't say exactly what period the decade covers but I compared the CPI in December 2009 to that of December 2019, and found the CPI was up 18.9% over that period.

http://data.bls.gov/timeseries/CUSR0000SA0

So that means it's a real (i.e. inflation-adjusted) increase of (1.20/1.189 -1) *100% = 0.92% increase over a decade

On top of that we have a 7.1% larger population than we had 10 years ago. So the per-capita inflation-adjusted credit card debt is quite a bit lower than a decade ago.

https://www.worldometers.info/world-population/us-population/

On the other hand, it ought to be since 2009 was the pit of the Great Recession. That we're at about the same level of inflation-adjusted per-capita credit card debt now as back then is not too comforting.

[Recursion]

28. Not to mention that a decade ago was the literal nadir of consumer credit

what with the whole global economic collapse.

[Wellstone ruled]

22. Nice not to have a Credit Card Payment isn't it.

But,these unused Cards have a downfall. The issuer keeps sending info to the three Credit Agencies and if you let any card sit dormant,do not know the number of days,your limit can drop,your interest rate will most likely be adjusted upward and treated as a dead account.

Esperian is the ugliest when messing with Fico Scores. So what we do is,put a purchase on the card knowing we do the payoff one day after it is posted in the Transaction Window of our Account. Learned this directly from our Credit Union customer service person.

[Initech]

30. I wouldn't use Experian if you paid me.

Same with Lifelock or any of the other BS services that you don't need. They're making money selling an invisible product and they're the worst to deal with.

[Wellstone ruled]

32. Experian is the usual first in line for

Banks reports on Clients. Yes they are pure nasty,btw,all those junk mailers you get as well as some of those unwanted phone calls,they happen because Experian sells their Phone and Mailing lists to anyone who pays the fee.

[Rorey]

31. That's pretty much how I do it too.

I try to use each of them at least every other month, and then pay them off shortly after the purchases show up in my accounts.

I think credit cards are fine when coupled with self-discipline. I get perks and don't have any with annual fees, so they actually save me money. But self-discipline is imperative.

[Wellstone ruled]

34. Oh so true,

sucks when you have to have one in order to rent a car,or buy plane tickets. Worst is,for many folks who need Utilities in some Cities. Another is buying Auto,or Home Insurance. Or even Satellite or Cable service.

[NutmegYankee]

26. I have 2 cards that I use constantly.

I have never once paid interest on them since I pay the statement balance every month in full. I get the protection from theft of the cards and rake in the rewards from those cards.

[Rorey]

33. That's the way to do it.

I forgot to mention the protection. And they can be a big time-saver too, in that you can pay quickly.

[unitedwethrive]

36. Yup, us too.

It's been over 20 years that we've been charging EVERYTHING possible on our cards, and have our accounts on autopay to pay of the entire balance each month. In that time, we have taken nice vacations once or twice a year and have never paid for flights or hotels (for our family of 5). We have chosen cards with fees, because we actually use the perks that are offered, like paying for our Global Entry fees and travel expenses, as well as providing upgraded trip and rental car insurance.

I feel much more comfortable giving my kids a credit card when they started being independent (usually sometime in middle school) than having them carry around cash. It's easier to track their spending, and if they lose or misplace it, the fix is relatively effortless.

[spinbaby]

50. That's what I do

I put everything big on a card that gets me air miles, pay it off right away, and average about one free flight a year.

[Recursion]

27. A decade ago was an historic low for consumer debt because the global economy had just collapsed

Being up 20% from that isn't necessarily a bad thing

[PoindexterOglethorpe]

35. I'm a bit dismayed, but not entirely shocked at that figure.

I was carrying about that amount of unpaid credit card debt for a while, and then a couple of years ago was able to pay it off. I still use a credit card but pay it off each month, so there's no interest charged. I use the points on the card to buy myself gift cards for things like the local movie theater chain or certain restaurants.

I actually pay cash for all of my day-to-day expenses, including buying clothes and groceries. I find it a much more effective way to manage my money.

While it's possible to live entirely without a credit card, they are useful for large purchases or emergencies. I tend to think not having one at least for emergencies isn't such a good idea. I also find the tendency of younger people to have zero cash on them because they use a charge or debit card for everything to be quite annoying. Because most places have some sort of minimum to use a card, they wind up purchasing something they don't really want to get the thing they do want.

Clearly, different people lead different financial lives.

[Iggo]

43. "I also find the tendency of younger people to have zero cash on them...to be quite annoying."

My department at work consists of me and another guy in our late fifties, three guys twenty-five and under, and our supervisor who is about in the middle. Fun times paying separately at Chili's, I tell you what.

Even more fun when we eat off the taco truck.

[Kurt V.]

51. Short answer. raygun

[MissB]

53. Yep. I'm wondering how many folks on DU are too young

To know what that means.

[NutmegYankee]

55. Even millennials know Ronnie Raygun. nt

[MissB]

59. Oh yeah of course they know who he is

But do they know that credit card interest used to be deductible until raygun.

[NutmegYankee]

60. I did.

The tax overhaul in 1986 took it out.

[hangaleft]

62. Raygun wanted to eliminate the deduction of mortgage interest

He succeeded in eliminating the deduction of credit card interest, interest on personal loans (e.g., interest on auto loans) and interest on student loans. He also eliminated income averaging, which saved me a bundle. All “reform”s targeting the little guy.

[keithbvadu2]

56. My ex-wife did not understand why I insisted that we pay off the credit cards every month when most

My ex-wife did not understand why I insisted that we pay off the credit cards every month when most of our friends had a permanent balance due.

After the divorce, she ran up the cards and realized how much interest she was paying and not running down the balance very quickly.

She took out a bank loan and paid them mostly off.
She still had the same amount of debt to start but the lower interest rate allowed her to pay off the balance much quicker.

When she bought her trailer and land, the bank asked her for her cc balance.
She said it was about 600 or 800 dollars.
Said his jaw just about hit the floor.
He was used to hearing 3000, 5000, 8000 or more.

Now she understands.

[Happy Hoosier]

57. I had no credit card debt for years, then....

Last year happened. Lots if unexpected home repair expenses, medical bills, and some other disasters all happened. I used the credit cards. And I am glad I had them. But now I al paying them off. It’ll probably take a few years.

[Yavin4]

58. This is what's driving Trump's "great" economy. Borrowed money.

Debt is still cheap thanks to the Fed.

[MiniMe]

61. 20 years ago, I had a pretty large CC balance

Finally sold my house and paid off all the balances. My credit was ruined for about 7 years, but it is good now, and I actually have a few cards which get paid off every month. I am actually carrying 0 debt at the current time,and it feels good.