If you’re struggling to pay off credit card debt, you’re not alone. In both 2023 and 2024, one in three American girlfriends will have more credit card debt than they have in savings. According to the bank interest rate survey,.
Inflation has subsided and the job market remains strong, but Americans are still struggling to keep up with credit card payments. According to the report, by the end of 2023, Americans will have more than $1 trillion in credit card balances, a record high. Latest data from the Federal Reserve Bank of New York.
“Delinquencies on credit card and auto loans remain above pre-pandemic levels,” said Wilbert van der Klaue, economic research advisor at the New York Fed. in a news release Early this month. “This indicates increased financial stress, especially among young people and low-income households.”
Which is more expensive: credit card debt or emergency savings?
Approximately 36% of U.S. adults report having more credit card debt than money in an emergency savings accounta recent Bankrate survey found.
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The amount of credit card debt and emergency savings varies by generation. Millennials and Gen Xers are more likely than other generations to have more credit card debt than they have at their disposal for emergency savings.
“Recognizing that the cost of incurring debt has increased significantly over the past two years and that levels of emergency savings are inadequate, more Americans are choosing to combine debt repayments with emergency savings rather than eliminating one or the other.” “We are focused on increasing both at the same time,” Greg McBride, Bankrate’s principal financial analyst, said in a statement.
Regardless of their financial situation, 36% of Americans said they prioritize both paying off debt and increasing emergency savings, according to the survey.
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What is the average credit card debt?
The average American household carries $7,951 in credit card debt annually, according to 2022 data from the Federal Reserve Bank of New York and the U.S. Census Bureau.
How much has your credit card debt increased?
Credit card balances increased by approximately $50 billion (4.6%) in the fourth quarter of 2023.
Credit card delinquencies, where cardholders default on payments, also increased.
New York Fed researchers said that while the U.S. economy is generally stable, there are some areas where conditions are worsening. Americans are overextended.higher price food, gas, housing Contribute to credit card debt.
See diagram:How Americans’ total credit card debt reached an all-time high
Credit card debt by generation
Gen Xers have the highest credit card balances of all generations. Debt increased for each generation from 2021 to 2022, but the silent generation saw the smallest increase. Depending on bank rate.
According to Bankrate, the average credit card debt owed by each generation is:
- Gen Xers have an average of $8,134 in credit card debt
- Baby boomers have an average of $6,245 in credit card debt
- Millennials have an average of $5,649 in credit card debt
- Silent Generation (born 1928-1946) averages $3,316 in credit card debt
- Gen Z has an average of $2,854 in credit card debt
George Petras contributed to this report
