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10 Shocking Credit Card Debt Facts


There are a lot of ways you could get into trouble financially, but one of the most difficult to recover from is credit card debt. With its common high interest rates, anyone who uses them and doesn’t pay off the balance within the initial thirty days could find themselves struggling.

On average, Americans use of credit cards has tripled in the past twenty years, with charges totaling into the trillions of dollars. This free-for-all use of credit cards usually comes with a pretty hefty price. Most of that is attributed to the higher interest rates, but there are other facts about these little pieces of plastic that may surprise you.

1. You Are Not Alone.

If you feel you’re in the minority when it comes to credit card debt, think again. With 46% of the adult population carrying an outstanding balance on their credit cards, you’re in company with a lot of people. It seems that while it is recommended to pay off the balance every month, more people are making it a habit of carrying it forward and paying the hefty insurance rates with it.

2. Large Balances Can Take Up To A Decade To Pay Off. 

Using your card to the max may be easy but paying it off can be really hard. Today, with the average interest rate at nearly 17%, a $6,000 debt could easily incur another $6,000 in interest over time. Often, if you pay over an extended period of time, you will end up paying more in interest than you did for the purchase itself.

3. We’re Adding More Than We Are Paying Off. 

US consumers are excellent at spending but not so good when it comes to paying. According to CardHub, in 2016 consumers paid their credit card companies $26.8 billion dollars, but they added $71 billion in new debt. That means they are only paying off $38% of the amount they actually owe.

4. Average Debt Owed Is Nearly $6000 Per Household. 

On average, American households hold around $5,700 in unsecured debts like credit cards. This means that most families weren’t able to make a significant dent in their credit card debt, even though other economic factors improved over the years.

5. Interest Rates Are Not Coming Down.

While you might think that the economic situation would bring down the high interest rates, but most US credit cards still average 16% or higher. Add to that the penalty interest consumers must pay for every late payment they make, and you might find yourself paying as much as 28%.

6. One Late Payment Can Severely Damage Your FICO Score. 

Paying late is better than not paying at all, but you will pay in other ways. If you are repeatedly late or you pay more than 30 days past the due date, your lender may report you to the national credit bureau. Even one late payment can remain on your report for up to seven years and can bring your score down as much as 100 points.

7. The Most Indebted are the Gen Xers. 

The least amount of credit card debt belongs to the Baby Boomers, but the generation that owes the most are the Gen Xers. Those born between 1967 and 1981, hold an average credit card balance that is nearly $8,000. In addition, credit scores have historically dropped lower with each successive generation.

8. One-Fifth Of Americans Hold More Credit Card Debt Than They Have In Their Emergency Fund.

It is recommended that everyone have on hand an emergency fund that will cover three-to-six months of living expenses. However, at least 12% do not hold any emergency savings at all. That means that even if they don’t carry credit card debt, an emergency could put them into debt at any time.

9. Men Tend To Carry more Debt Than Women. 

While women are often regarded as more shopping oriented, it is the men that carry the most debt. With an average debt load of $7,407 as opposed to women with an average debt of $5,245, it is clear who are the biggest spenders. Women’s debt load is a full 22% less.

10. Odds Are High That Many Will Die Carrying Credit Card Debt.

Records show that 65% of Americans can expect to die still owing a balance on their credit card. That’s more than those who are expected to leave this earth with a mortgage payment due. On average, people tend to leave a balance of more than $4,000; a legacy that their family members may have to deal with.

It is clear that credit card debt is a huge problem that Americans have yet to deal with. If you’re struggling with credit card debt, it doesn’t have to be the norm in your case. It is better to take action now to reduce this expense and give you a bit more financial freedom so you can really get into enjoying life.