More and more credit card holders are rolling their credit card debt over from month to month, a survey by Bankrate shows. Higher prices and higher interest rates have led to more consumers piling up debt.
Credit card debt reaches all-time high
According to a report from the Federal Reserve, credit card debt has reached an all-time high and more Americans are missing their payments every month.
Fox – Seattle
At a time of extremely high credit card interest rates, more and more Americans are piling up credit card debt month after month, a new survey shows.
Half of credit card holders surveyed in June for Bankrate’s latest credit card debt survey said they were carrying debt from month to month, up from 44% in January — and the highest since March 2020, when 60% of people were carrying debt from month to month, according to Bankrate’s surveys.
A third of U.S. adults (36%) have more credit card debt than their emergency savings, according to Bankrate, the same amount as a year ago and the highest since the personal finance website first asked the question in 2011.
This comes at a time when the average credit card interest rate in the U.S. is 24.92% – the highest since LendingTree began tracking interest rates monthly in 2019, the online lending marketplace reported Friday.
Because of this situation, nearly six in 10 (58%) respondents have no plan to pay off their credit card debt, according to a June Bankrate survey of 2,350 American adults conducted by YouGov.
“Credit card balances have skyrocketed since the start of 2021,” said Ted Rossman, senior credit card analyst at Bankrate, in the survey report. “High inflation and high interest rates have eaten into Americans’ savings, and more people are carrying 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 had $7,951 in credit card debt annually.
According to credit agency Experian, the average credit card balance of U.S. consumers was $6,501 in the third quarter of 2023, up 10% from the previous year.
What can you do to pay credit card bills?
Some advice from Bankrate to help you pay off your credit card debt:
- Cut back. Use some of your available budget to pay more than the monthly minimum on your credit card.
- Set aside. Use additional funds, such as a tax refund, a work bonus, or wages from a part-time job, to pay off your credit card debt.
- Change cards. Get a 0% balance transfer card so you can transfer your debt to a new card without interest for a limited time (often 12 to 21 months). “You can use this time to aggressively pay down your principal without worrying about additional interest,” Bankrate’s report says.
Contributors: Sara Chernikoff
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