If you’re like most Americans, you love your plastic. Nearly 80% of the nation’s consumers have at least one credit card.
And the average wallet packs more than three. Credit cards are appealing for many reasons: Perhaps you’re trying to rack up travel rewards or take advantage of balance transfer offers.
Credit Card Debt Facts
There are multiple facets to credit card debt. There are multiple myths surrounding these multiple aspects that people tend to believe.
These myths may hurt them as they work to pay off their debt. Knowing the credit card debt facts, over these myths, will help you to better understand your debt.
You can better understand what you need to do to pay off that debt. You can also better understand the culture of debt in society, and how you must work to stay away from a growing trend.
1. Interest Rates Can Change
Interest rates are not set in stone. While you may enjoy a small interest rate now, that interest rate could jump without notice.
While laws are being passed to change the rules regarding interest rate changes, they may still be changed until these changes become law.
By sticking with monthly payments and by religiously paying down your debt, you can avoid these interest rate changes.
2. Minimum Payments Are Not Enough
Many people believe that the minimum payments that they are making will be enough to pay down their cards debt balance.
hey do not realize that, on many of their credit cards, the interest charges per month can be larger than the minimum payments.
If you are only paying the minimum payments on your cards, you may still be gaining debt.
3. Debt Continues to Rise
When people are dealing with debt, they tend to go into more debt. People will often open up new credit cards to help pay off their old credit cards.
Eventually, they fail to realize that they have dug themselves into a deeper hole. General credit card debt is rising by at least 1% per year. Debt is also rising on the personal level.
Slowly but surely, the average debt for Americans in debt is rising. Credit card balances carried from month to month continue to inch up, reaching $420.22 billion in late 2018, according to annual analysis of U.S. household debt.
That’s an increase of about 5% over last year. And for Americans carrying that debt, the impact is significant. The average U.S. household with credit card debt has an estimated $6,9291 in revolving balances, or balances carried from one month to the next, the analysis found.
4. More People Go Into Debt Every Day
As a nation, America has almost $1 Trillion in credit card debt. This number continues to rise. In the past year, 700,000 people in America have gained a credit card that did not previously have one.
This means that over half of a million people went into credit card debt in the last year. Credit card debt is an easy habit to fall into.
Debt continues to rise for individuals, and for society as a whole. If you can, stay away from creating new debt as you work to overcome your current debt.
With that being said, you should still work to increase your payments to avoid the issues that come from many of these credit card debt facts.
By knowing the truth behind these facts, however, you can take the best possible approach to your financial situation.