Credit Card Debt Reaches New High in the U.S.

Denver – This year, Americans have accumulated more credit card debt than ever before. According to a report from the Federal Reserve Bank of New York, total credit card balances have surged to a staggering $1.21 trillion.

To help people navigate this growing trend, Denver7 sought insights from Brian Rush, CEO of Horizons North Credit Union.

Q: When is it appropriate to use a credit card?
A: It’s generally wise to use credit cards for building credit, earning rewards, and for safety, especially when shopping online. Using a credit card for everyday expenses—like groceries and gas—can help track spending and earn rewards. But, you really need to be cautious to avoid overspending and to pay off the balance each month.

Q: What common mistakes do people make with credit cards?
A: A lot of people tend to pay only the minimum, overspend just to rack up reward points, and these habits can negatively affect their credit scores.

Q: What about credit cards that come with fees?
A: It’s important to evaluate the rewards you’re gaining from a card. If the benefits outweigh the annual fee, it could be worth it. However, if you’re carrying a balance, opting for a no-annual-fee card that offers lower rates often makes more sense.

Q: How can individuals keep track of excessive spending?
A: Tracking your expenses is crucial. Many banks have tools in their apps for this, but if you don’t have that, a straightforward spreadsheet can help you see where your money goes.

Q: If someone has credit card debt, what’s the best approach to pay it off?
A: Visiting your financial institution can help. They might offer low-interest consumer loans. You could potentially leverage assets like your car or home equity to lower interest rates while you pay it down.