With credit card interest rates sky-high, more Americans are taking on credit card debt every month, a new survey finds.
Half of all credit card holders were surveyed in June as part of Bankrate’s latest research study. Credit card debt investigation That’s up from 44% in January and the highest level since March 2020, when 60% of people were carrying debt from month to month, according to Bankrate’s survey.
A third of U.S. adults (36%) have more credit card debt than they have saved for emergencies, according to Bankrate’s findings — the same amount as a year ago and the highest since the personal finance site began asking the question in 2011.
this is, Average credit card interest rate The monthly interest rate in the U.S. was 24.92%, online lending marketplace LendingTree reported Friday, the highest since the company began tracking monthly rates in 2019.
The situation has led nearly six in 10 (58%) to not have a plan for paying off their credit cards, according to a Bankrate survey of 2,350 U.S. adults conducted by YouGov in June.
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“Credit card balances have skyrocketed since the start of 2021,” Ted Rothman, senior credit card analyst at Bankrate, said in a research report. “High inflation and high interest rates are eating into Americans’ savings, forcing more people to carry more debt for longer periods of time.”
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How much credit card debt does the average American have?
According to 2022 data from the Federal Reserve Bank of New York and the U.S. Census Bureau, the average American household carries $7,951 in credit card debt per year.
of Average credit card balance U.S. consumers had $6,501 in outstanding mortgage debt as of the third quarter of 2023, up 10% from a year earlier, according to credit reporting firm Experian.
What can you do to pay your credit card bill?
Here’s some advice from Bankrate on how to chip away at your credit card debt.
- reduce. Pay more than the minimum monthly payment on your credit cards from your discretionary budget.
- Place it aside. Excess funds, e.g. Tax Refunduse bonuses from work or income from a side hustle to pay off credit card debt.
- Change the card. Get 0% Balance Transfer Cardsmeaning you can transfer your debt to a new card interest-free for a limited period of time — 12 to 21 months. “You can use that time to aggressively pay off the principal without worrying about additional interest,” says the Bankrate report.
Contributor: Sarah Chernikoff
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