Average interest paid by Americans on credit card debt is

[multigraincracker]

23.7%. Average family CC debt is $10.600.
That’s crazy. My goal is to pay zero interest. Have been pretty successful sense I retired 23 years ago. Kind of my hobby.

[Gimpyknee]

1. I've paid zero interest for 55 years.

I was taught if you cannot afford to pay for it, don’t buy it.

[speak easy]

2. But that shiny new phone is So Fine.

[obamanut2012]

6. So are groceries and medical costs

[speak easy]

18. But ... TikTok!

[Johnny2X2X]

19. +1000

The only time I've ran up any credit card debt was for necessities in hard times and then for emergency surgery for our dog.

No CC debt right now and enough savings to avoid any in the near future, but none of can know what's around the corner and for millions of families the choice is pay for an emergency car repair with a credit card or lose your job, pay for groceries with a credit card or go hungry, dental issues, emergency home repairs, medical and pet care expenses, etc. Too many people have credit as their emergency fund instead of savings.

Are there people out there charging cards on fun and luxury items? Sure, but I'd bet they're easily outnumbered by people using them for bare necessities and emergencies.

[MichMan]

46. Hard to save up enough to buy a home or a car

[Happy Hoosier]

58. The trick to the car is to get ahead of the game.

I bought a decent, but not expensive used car, even though I could "afford" new car payments.

I paid off the used car quickly. I then put my "new car payment" in a high-yield savings account.

When I really needed to replace the older used car, I had enough saved to buy a pretty decent used car for cash.

That car lasted about 7 years, by which time I had enough to buy a new car for cash.

Rinse and repeat... no more car payments for me. (I admit I have a well-paying job).

[kimbutgar]

51. Ditto if I can't pay for it at the end of the month I won't charge on a credit card.

[Torchlight]

65. Nope

[Morbius]

3. I have racked up some credit card debt.

I work as a courier and a dispatcher for said courier service. My car is my livelihood; if I can't drive, I can't earn. I've had to go into debt on credit cards to fix the car. I am not sure of the interest rate but it's probably close to 20%. I don't use the credit card for anything else except the monthly health insurance payment, and I always pay more than that much every month. I set that up so I would be using the card and improving my credit score.

[SWBTATTReg]

56. Hey, this is a good reason to 'borrow', you're fixing your livelihood. There are some valid reasons to borrow.

Now, once everyone is up to speed and have saved up enough, then no one has to 'borrow' anymore, and just use their own money, and pay themselves that interest. That's what everyone needs to get to. Get to a point when you're paying yourself!

[lastlib]

4. Why don't people learn??

"Pay the damn things in FULL, EVERY month!!"

It's about using THEIR money, not yours. It baffles me that some folks don't grasp that.

[Morbius]

7. What if I can't?

I've been hit with severe car repair costs. I can't pay it in full every month, much as I wish I could. I bet I'm not the only one who has credit card debt who didn't get it by living high on the hog.

[NJCher]

30. Transfer the debt

To a new credit card who will give you interest free for 12 months or so.

[Hotler]

42. Transfer to a credit union, better deal and rates. Don't underestimate the power and leverage

of your consumer dollar. Be well.

[FBaggins]

63. The hard (but so often true) answer...

... you probably can't afford 25% interest either.

You don't have to be "living high on the hog" to be spending more than you can afford.

But no... you are far from the only one. Almost half of adults carry a balance.

[Grokenstein]

10. Sometimes you don't have a choice.

Five years ago I was 30K in the hole. Thankfully I have a good union, and with diligence I've just about wiped all that debt out. But a medical emergency or some other gutpunch--like, say, a collapsing economy--could undo it all. I'm already resigned to never retiring, and I avoid outrageous consumption.

So maybe the whole "just stop buying avocado toast" approach isn't appropriate here.

[GoCubsGo]

27. I do that whenever I can.

But, there have been stretches where that wasn't possible. Shit happens. Meanwhile, I just don't buy stuff that I don't absolutely have to have. It makes being able to pay it all off every month a bit easier. I'm still in the Bush recession, so I have had plenty of time to learn how to make do without all that stuff.

[EllieBC]

60. I'm a banker. It's not that people do not want

to pay off their debt monthly. They can’t. Groceries, gas, kids activities, when things break down…for a lot of people that goes on the credit card because they don’t have the liquid cash.

[Oopsie Daisy]

5. Ditto. Every account is paid down to ZERO every month.

And our air-miles and hotel points continue to accumulate. One day it will be safe to travel abroad again.

[SickOfTheOnePct]

14. We're at that point for the 99.9% of our credit card use...

...we have a credit that we use for everything we can, and like you, we're accumulating lots of miles for travel at some point; in the vast majority of cases, we pay it off every month.

But I also have another credit card that I haven't actually used to buy anything in years, but it has constant offer of 0% interest for 12 or 18 months for balance transfers.

A couple of years ago, we decided to put the house into "lower maintenance mode" as we age - new siding, new gutters & gutter guards, and have the vinyl coated aluminum wrap on all of the exposed wood to eliminate the need to paint. The contractor had financing offers, but the lowest offer was 7.5%.

So, we put it on our card that gets miles, paid off as much we could that month, then did a balance transfer to the other card. Yes, there was a 4% transfer fee, which I just treat like interest, but still better than we could get with a HELOC or the contractor offer. Paid it all off in 12 months, and done.

[Oopsie Daisy]

24. Our new windows had an "interest free financing" offer which we accepted...

... it was through Wells Fargo with a dedicated "Window World" account. But... READ THE FINE PRINT. It was 18 months financing with 12 months interest free. If the debt was not fully paid in 12 months, the interest for the full amount would be added to the balance due starting in the 13th month.

We had it paid in full after the 10th month. Why risk it? --- "Thanks for the 10-month free loan, Wells Fargo... here's your final payment!"

[SickOfTheOnePct]

39. Exactly!

We had a new roof put on a few years ago, and it was pretty much the same thing - it was 0% interest for 12 months, but if you had even a dollar left due at the end of 12 months, calculated interest at 24.99% was paid for the entire balance!

Like you, we paid it off early (about a month) just in case they tried any shenanigans, we would have time to contest it before the year was up.

[Oopsie Daisy]

44. What we found to be annoying (deceptive) was that the offer was "interest free for 12 months" HOWEVER*

* the calculated "minimum amount due" would have made it an 18 month loan. This opens the door for someone who's inexperienced to fall into the trap. That's an extra $1250 that someone probably couldn't afford (or that would be better spent elsewhere.)

>> Like you, we paid it off early (about a month) just in case they tried any shenanigans, we would have time to contest it before the year was up.
Leave NO room for errors or games!

I'm sure these promotions end up getting a LOT of customers who don't understand what's going on. Whether it's because they didn't read the conditions, or because they didn't watch the deadlines carefully... I'm sure it makes a LOT of money for the lending institutions.

[Captain Zero]

47. I do those loans too. They are betting we screw up and then they tack on the interest.

It must be a good bet for them or they wouldn't offer those loans.
But they lose out to us.

Of course, don't they put ours on the books as a performing loan, and then some weird way they can count it as an asset if they want to.

[lastlib]

49. You, like me, are what the banks call a "deadbeat."

We use THEIR money, interest-free, because we pay it in full before it's due, and they get NO interest from us. You would think a "deadbeat" was somebody who doesn't pay when it's due, but nope--it's us responsible folks.

[multigraincracker]

8. I use to carry cash to pay for stuff.

Now I got a credit card that pays me 2% on all of what I buy. Now buy everything with it.
I only live a 1/2 mile from the bank, so I stop in every week, pull out my card and pay off the balance. This is way before I even see or get the bill.

[Norbert]

9. I am actually taking the naxt step.

My SUV is scheduled to be paid in a little over 3 years. I want it paid off by Summer's end.

I have a VISA that gets paid off every month, a MC that hasn't has a balance since May and a Kohl's card that I rarely use.

I want effectively no debt bc I think the economy will come crashing down sometime soon. It's what the idiot in the Pennsylvania Ave construction zone does best.

[niyad]

11. There is a great deal of judgment and sanctimony when it comes to credit cards.

For some, it is an appallingly expensive addiction. For others, it can be a life-saver. I know people in both categories. I also know people who don't use credit cards, or who can't get them. And I also know the seductive and manipulative nature of our consumerist society, advertising, etc. So, perhaps lookking at the root causes might prove helpful.

[multigraincracker]

12. I agree. No issue is black and white.

There is time you must borrow. I’m just suggesting you be mindful of it.
I really hate the idea of the ultra rich getting richer off us poor and middle class.

[Morbius]

13. That's always been the case. though.

It seems to have gotten worse, but that may just be my perspective.

[CTyankee]

16. Any debt carrying interest over from month to month is what you pay off first, if you can.

If you can on a limited budget. I am facing the same problem. I now use a debit card but I have some cc debt and after our food and house needs, I have faced this issue by contacting some of my debt holders and working out a payment plan. My dental plan covered NOTHING of my emergency dental bill and I called my dentist and worked something out. DITTO the guy who does our taxes.

My goal is to live within my needs and here's what I did: at my age and retired: I just stopped buying new clothes when possible. Also, I don't need everything I see on Amazon but some items I can actually get cheaper there than on local store shelves. With free shipping it's even better! That is good use of your debit card and probably why they were started initially.

If you can, make paying down cc debt your goal. Cut down or just stop eating out. Plan your weekly menus in advance, using the week's special from your supermarket (we get an insert in our Thursday newspaper from our local Stop and Shop store). I am limited by an arthritic back as to how much time I can spend in the kitchen, so that is a challenge -- no complicated recipes!

The problem homeless people have is having to survive on lots of fast food. By definition, these people cannot cook up their own meals and save money that way. It is shameful that we even have homeless people, but til we get that solved, we must provide local government resources for them.

[sir pball]

67. If you regularly shop on Amazon, a Chase Amazon credit card can be very worthwhile.

Any purchase over $50, which is easy enough to hit if you bundle things, is interest-free for 6 months. It literally shows up as a purchase option if you have an Amazon card set as the payment method, e.g. "$10.45/mo for 6 months". It's not quite as good as just paying debit, but it does allow you to spread out the payments for a bit with no penalty.

[Diamond_Dog]

28. The voice of reason as usual, niyad!

[SheltieLover]

32. For sure!

[niyad]

37. Thank you so much.

[SheltieLover]

31. A very thoughtful, inclusive perspective.

As life has a way of chucking curveballs as us out of left field, sometimes one needs to use credit.

[Diamond_Dog]

35. Absolutely, SheltieLover!

[SheltieLover]

36. Thx, DD

[niyad]

38. Sadly true.

[obnoxiousdrunk]

41. +1

[leftstreet]

45. +1

[EllieBC]

61. There are a lot of Boomer GOP bootstrap

sounding comments on this thread.

Guess they just think anyone younger than 60 should just work, have no fun, but keep working to help pay for them to retire.

[Sharma Dreihund]

15. Usury is evil and needs to be stopped.

I'm going to guess that you are not a farmer or a small business owner. Not everyone can pay zero interest, and usury is evil. Citizens in Europe pay much lower interest rates on credit cards because most of the governments force the banks to charge less. Banks and their credit card rates are allowed to kill us here in the USA.

[TheRickles]

17. Agreed. Rates of 20% and over are ridiculous, and are proof that a cartel runs the credit system.

Otherwise there would be competition among Visa/MC/Discover to offer lower and more attractive interest rates (remember the free market?). Instead these credit card rates have been sky-high for years, regardless of what rates the Fed is setting. It's usury, plain and simple.

[mdbl]

22. It used to be that way in the US also

Until people were convinced to vote for republicans who would get control and water down every consumer protection law. This has been happening for decades - little by little, every time they would gain control more laws would be changed or watered down until here we are today. At one time, anyone charging 20 % or more were considered loan sharks. Greed has won over our government and 99% of our population will continue to suffer. It only gets worse.

[multigraincracker]

25. I remember when 7 1/2% was the law.

[mdbl]

66. Or the days when credit cards could only charge about 3% above prime

[Pototan]

20. I pay my CCs off every month

No interest. I do have an annual fee on one of my cards that has sky miles.

No mortgage, no car payments, no loans, no interest. It certainly makes retirement less stressful.

[twodogsbarking]

21. Had credit cards for forty years. The only time I paid interest was a 1% deal years ago.

Find another way.

[multigraincracker]

23. In 1982 I got divorced. Talking with my dad on the phone,

he asked how much
I owed on my car. He told me that after I pay it. Keep the car and make that payment to myself until I could pay for a new one. I might have a repair to make, just use the one or two of of those payments. He was the smartest person I ever knew.
In a coupe of years I had the money for a new one. Seemed like I was paying twice as much buying on credit.
That was the last car payment to bank I ever made. Thanks dad.
My next strategy was to always wait 3 days before any purchase of anything I wasn’t sure I needed. Usually after a day I forgot about it.

[lark]

26. We quit using credit cards 35 years ago after having to go to CCC when my husband lost his job.

We paid off over $12,000 in debts (with some discounts) and cleared everything in 4 years. We learned to only buy what we could pay for and to save for bigger purchases. We bought furniture with zero interest and paid it off in the time allotted. We're now retired with zero debt, both cars and our house are fully paid and ours. We eat out twice a week and otherwise make our own food. Growing our food is the next challenge.

[CrispyQ]

29. When companies started going to paperless billing I missed a few payments & got dinged with fees,

so I set them all up to pay on my CC, & now I'm never late. I make one payment to my CC card once a month & everything is done. I carry a balance now & then but mostly use it for bills.

[Historic NY]

33. I like to use their money and pay it off on the last day w/o interest.

The problem is banks that use our money but pay squat.

[usedtobedemgurl]

34. We only have cards with no annual fees

And great points. We pay off in full at the end of every month. We use points to get gift cards to buy groceries/pet supplies/to give gifts for Christmas or birthdays.

I look for credit cards that have bonuses. A lot of them will have something like if you spend a $1,000 in 3 months, you can get a $200 bonus. Over the course of a year, that can add up to around an extra $750-1,000 in our pockets and then I open a new one with another bonus.

It has been years since I paid any interest.

[NickB79]

40. I make it a point to pay off mine in full every month

And I understand that I'm lucky to have the means to do so, as many aren't so fortunate.

[niyad]

43. Thank you for acknowledging your good fortune. I wish others could be

equally aware.

[NickB79]

57. Last month I took my family to Denny's for dinner

Instead of charging me $46, they accidentally charged me $460! I only saw this two weeks later.

The manager was awesome and refunded it without question, but it made me very aware how such an error could have destroyed someone living paycheck to paycheck.

[MineralMan]

48. That's Usury. It's unfair and should be illegal.

It's just another indication that salaries are too low for most people. It's just possible to live debt-free, but it requires some serious controls over spending. And, emergencies can destroy the best plans at any time.

But, any interest that high is purely motivated by profit seeking and greed.

[Johnny2X2X]

52. And that's the average

There are people paying much more, 29.99% APR which is an effective rate in the high 30s.

[hunter]

50. Once upon a time I paid medical bills with a credit card.

I won't do that again.



Couldn't pay the bill on time, interest rate shot up to 30%, and then we couldn't get credit at all.

Eventually we settled the credit card debt for what we owed and the usurious interest and penalties we'd already paid. The bank issuing the credit card did not lose any money.

That still left us with a huge amount of medical debt, stuff our insurance hadn't paid. Fighting with insurance companies and hospitals is no fun.

After that I stopped giving a shit about credit.

It's been our good fortune lately to have enough money in savings to pay any unexpected veterinarian bills with cash, or even replace a car should one fail catastrophically. (Knock on wood...) I'm also a pretty good mechanic. And plumber. Etc.

My parents had dreams of being full time artists and more children than they could comfortably support so I had quite a lot of experience living very frugally as a kid.

In my late teens and early twenties my mind went a little sideways and there were times I was living in my broken down car and dumpster diving for food. I've also spent time in locked psych wards.

Having a credit card does not make me feel secure, it only increases my anxieties. Having a big bag of rice in the cupboard and the means to cook it is the kind of thing that helps me sleep at night.

Aside from burning fossil fuels, measuring the value of almost everything in money is the damned most fucking stupid thing humans do.

I want to live in the Star Trek universe where money is extinct.

[phylny]

53. Some people just don't get it.

My husband‘s sister had an outstanding balance on her Discover card for 10 years. During this time, she got inheritance from both her mother and her father. She had more than enough money to pay off her credit card debt. We tried to explain to her how much money was accruing in interest every month by only paying the minimum due and she countered with, “Well, I only have to pay a little bit each month.” Couldn’t fix it.

[OC375]

54. Ooops!

Taking a bad fall or the car crapping out is enough to change the "I always keep a zero balance" thing into unmanageable credit card debt for many people who have always felt secure and have been financially squared away.

[Johnny2X2X]

55. I'll never forget orientation for college

Was a big fair, with booths and giveaways all over campus. They were giving you literal cash to sign up for credit cards. "Want $20? Here, just sign up for this card and you can have this $20 bill." So I did, and didn't use the card for a while, then the end of semester one year I ran out of food so I used the card, but just for food...and then to help pay for books the next semester. I carried that debt for years.

And then I got my first job out of college, first order was to finally pay those cards off. Until my car needed new brakes and then a new transmission. Next thing you know, that $1200 in credit card debt was $5500. Finally, paid it down to $1000,saw the end in sight, then my dog got sick and needed surgery, $1200 here, $800 there. Dog passed, had to put it's final pink shot on a card as well as cremation.

Then I started to make some real money, go some savings, cards being paid down. Car repair, oops, cards back higher. And then the big one, our adopted terrier diagnosed with cancer and given 4-6 months to live without treatment. Best dog ever. No way could I let her go at 5 years old. $3200 for surgery, $2400 for Chemo, another $2900 for a 2nd round of chemo. $2000K for other vet bills. Best $10K I ever charged in my life, she turned 12 this Spring.

Was chipping away at it for a good couple years solid, then I got a promotion at work that put me in the bonus program, that first bonus was $12,000 take home, presto, no more credit card debt. Step 2 was get $10K in the bank, done. Step 3 was to get 6 months bills into savings, just got there.

Would have been nice to have folks that I could turn to for emergency expenses in college or shortly after, but that wasn't my situation. Sure, I did make some mistakes. And I learned some good lessons from those mistakes. But I can probably count on 1 hand the times I used a credit card for anything but an emergency or absolute necessity like food or gas.

DU has an older crowd, many people are well off because they're later in their careers like I am. And I am pretty financially astute now, but I am not going to look down on people who have a bunch of debt on cards because I don't know their situation and I was there myself. And I was fairly disciplined, but more than anything I was able to pay them off just because I got further in my career.

[Happy Hoosier]

59. Sounds like my early life.

My parents ALWAYS had debt. I assumed it was "normal." I didn't really figure it out until years later. Now I am debt-free (except for my mortgage, which is ALMOST paid off). It's astounding how much life changes when you don't have those payments.

[Johnny2X2X]

64. I pay attention to this issue a lot these last several years

So many people struggling. I try to think of a common thread, I'm not sure what it is. Because I see people from all backgrounds struggling. I've seen financially astute parents pound these lessons into their children only to have their children run up credit cards anyway. And often times making more money is the only way out, but not always, I know couples making $200K a year with $150K in credit card debt that costs a fortune to service.

What I see most often is people charging car and home repairs because they don't have other options. Mother in law's septic system went bad, $15K to replace it, she charged it. She had a major flood and they didn't offer flood insurance, $12K to replace the furnace, hot water heater, water softener and electrical in her basement after.

Only 41% of Americans can afford a $1000 unplanned expense with savings. This about that, 3 in 5 would have to go into debt for any expense of $1000 or more. It's just incredibly hard to save for too many families because wages haven't kept up for 40+ years.

[Raftergirl]

62. I charge every possible thing to my CC so I get miles. I pay it off every month. I also have a large amount of

disposable income coming in every month, and I have a cash stash that is usually somewhere between 30k and 50k, that I use to pay for big purchases that I cannot use my CC for or to pay off those big purchase. For example, we bought a whole house generator that was $11K, that I put on my CC. But when I remodeled my laundry room, my contractor only allowed $5k to be put on a CC, so the rest of the balance ($35k) came out of my cash stash. Same for when we redid our front entryway into house - $9k came out of my stash. I also paid for new fencing ($11k) in back yard from my stash. We usually have one of these big budget items every year or two, so I build my stash up during lulls.

Last month we had an unexpected emergency, half of our huge Russian Elm tree came crashing down. Tree was severely compromised. The town removed everything that was on the ground, even what was on our property (it fell across the whole street) but the rest we needed to get tree service to take down, remove, grind the stump and bring in topsoil. The trunk alone weighed 12,000 lbs. it was only $2300 and I put it on my CC, which I just paid off in full yesterday, without having to take money out of my stash.

I am going to turn the spot into a flower garden next summer. Can’t wait!