Are You a Typical American Card Holder? |
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by: Janna Weiss
Americans thrive on credit. It’s estimated that each American credit card holder has three bank cards, two debit cards, and four retailer cards at any given time. That’s a lot of plastic! And Americans are relying on their credit cards more heavily than ever before.
If you’re a cardholder in America, you might have wondered how your situation compares to the national average. How much debt does the average card holder carry? How much do they pay off each month? What is an average credit card interest rate?
With some facts and figures from Citigroup Inc and the Federal Reserve, you can see just how your debt compares. You might be a typical American cardholder if…
- …you carry a balance from one month to the next. (Industry insiders refer to these types of customers as “revolvers”.)
- …you have eight or nine credit cards in your wallet.
- …your cards have an interest rate of 14.71%.
- …you use your credit cards to make ends meet.
- …you have at least $5,219 in credit card debt.
- …you only pay 3-4% of your total balance every month.
It’s not the most flattering financial picture, but it’s not as bad as you might have expected. Still, with the cost of living escalating in relation to wages, it’s obvious that credit card debt will continue to climb. Credit card debt rose 315% between 1989 and 2006. With few or no financial resources to turn to, people who need extra cash frequently find it in the form of credit cards.
Has your own spending gotten you into debt? If so, take some advice from the pros. Cut out unnecessary monthly expenses and use the money you save to pay off credit cards balances. This will require about three to four weeks of monitoring your income and expenses. Simple changes can help. For example, brewing your own coffee rather than picking up a cup from the coffee chop each morning can save you nearly a hundred dollars each month. That money can be put to better use in reducing your debt.
Don’t forget that your bank can also be a helpful resource. You can take out a personal loan to pay off your credit card debt. That loan will be repaid at a much lower interest rate than regular credit card payments. Just be sure to go with a lender you trust.
We live in a nation of debt, but there’s hope for us after all. With some careful planning and sound decisions, we can beat the national credit debt average.
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