Credit Card Debt

Credit Card Debt, Credit Score

How Credit Card Debt Impacts Your Credit Score

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Most consumers utilize a credit card at some point in their lives, and many of them carry credit card debt from month-to-month. While using credit cards responsibly can help increase a person’s credit score, having too much credit card debt can cause significant harm to that score.

The amount of debt you owe on your credit card is one of the biggest factors affecting your credit score. That’s why it is never a good idea to max out your credit card. And when your credit score goes down, you could end up having to pay higher interest rates on loans or any other credit you apply for. A low credit score can impact your applications for apartment rentals, cell phone plans, and more. Research by the Consumer Financial Protection Bureau has indicated that high income earners are as prone to financial stress because of debt as low-income earners.

Credit Card Debt

Half of Millennials and Gen Xers Carry More Credit Card Debt than Savings

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Nearly Half of Millennials, Gen Xers Have More Credit Card Debt Than Savings. 

Putting extra money in a savings account for the unexpected expense or emergency is a good rule of thumb. Unfortunately, for many American consumers that concept is nowhere near reality. In fact, according to a recent Bankrate study, nearly half of Americans between the ages 27 and 58 have credit card debt balances that exceed how much they have in savings.

Bankrate found that approximately 45 percent of consumers in the Millennial and Generation X categories reported that they were carrying credit card balances that were greater than their savings or emergency funds. What this means is a growing number of American consumers are relying more on credit than they are savings to get themselves through tough economic times.

Consumer Debt, Credit Card Debt

Debt is Hitting Home for Many in South Florida as Interest Rates Continue to Rise

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More consumers are racking up credit card debt at a pace not seen in decades as interest rates rise and inflation continues to pervade the economy. Many consumers in South Florida are struggling to manage this debt and as a result are in a vicious cycle that they cannot seem to escape.

Total credit card debt was on the rise towards the end of 2022. According to TransUnion, the average credit card user carried a balance of $5,805 over the last three months of 2022. This number is up 11 percent (11%) from 2021.

Credit Card Debt

New Study Reports Consumers Have Fallen Back into Bad Credit Card Habits

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American consumers are falling back into bad spending habits when it comes to credit card use, according to a recent study released by the personal finance website, WalletHub. Credit card debt increased by $39.6 billion during the third quarter of 2022. This increase is part of a larger trend that started in 2021, if not before.

During 2021, U.S. consumers added a total of $86.2 billion to the nation’s credit card debt balance. In the fourth quarter alone in 2021, credit card debt increased by $73.1 billion. Consumers did start the new year off well enough in 2022 by paying down approximately $12.5 billion in credit card debt, only to add $67.2 billion during the second quarter, followed by $39.6 billion during the third quarter. This figure is a record for Q3 reports.

Credit Card Debt

U.S. Cities with the Least-Sustainable Credit Card Debt

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High interest rates and high inflation are making it harder than ever to pay down credit card debt. American consumers started the year with over $1 trillion in outstanding credit card debt.

According to a recent study, the average U.S. household has over $8,900 in credit card debt, which is up 4.5 percent (4.5%) from last year. Consumers in certain cities seem to struggle more than others. This fact was recently documented in a study produced by personal finance website, WalletHub, listing which American cities had the least sustainable credit card debt.

Consumer Debt, Credit Card Debt

How to Pay Down Credit Card Balances with High Interest Rates

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Credit card debt has traditionally been one of the more difficult consumer debts to conquer. This is in large part because most credit card balances come with significantly high interest rates. The larger a consumer’s balance gets, the more difficult it can be to tackle the debt. While paying down credit card debt can be a challenge, however, it is not impossible. It takes proper planning and discipline but paying down a credit card balance on a card with high interest rates is possible.

According to LendingTree, the average annual percentage rate on a new credit card is over 20 percent, and rates only seem to be increasing over time, especially as the cost of living continues to rise.  This trend presents a major problem for American consumers with high credit card balances. In fact, according to reports from the Federal Reserve Bank of New York, credit card balances reached a high of $841 billion in the first quarter of 2022.