The Hidden Cost Of Increasing Average American Credit Card Debt
On a seemingly daily basis, the amount of debt that the average American owes on their credit cards is increasing. The entire financial world, not just the credit card market, is being affected by this trend. Mortgages, school loans, car loans, bankruptcies, and foreclosures are all affected by the average rate of credit card debt.
Credit card debt consolidation and other even more extreme methods that people turn to in order to eliminate their credit card debt have become more popular as the average credit card debt has gone up. Consider the actual statistics on credit card debt in America to see if the situation is really all that serious.
The Statistics on Average American Credit Card Debt
Here are some of the statistics. The average American credit card is carrying a balance right now of about $1,000. If the cardholder pays nothing more than their minimum two percent payment on that balance each month, they will have finally paid off the entire balance after twenty two long years. During that time, the interest charged to the account will reach $2,300.
On a national level, the average American household currently owes $8,500 in credit card debt. Individuals who have at least one credit card currently average more than $9,000 in debt. These statistics indicate that, since the year 1990, the average amount of debt that Americans owe on their credit cards has increased by 300%.
If you are wondering, what you spend in interest or even if you have not worried about until now, the average American spends more than $1200 a year in just interest payments alone.
This means that the average interest charges that are being paid on credit cards are larger than those that individuals have to pay for their rent or mortgage payment.
The average interest rate being applied to credit cards is also steadily increasing, currently being found at 18.9%. Introductory rates can sometimes be 23%. If you have had credit problems in the past, your rate could even be 30%. Half of all Americans claim that they will never tell their friends about the amount of money they owe on credit cards. The percentage of people who have reached the maximum limit on their cards: 23%. During the last year 13% of Americans have made at least one payment thirty days late. And 11% have admitted that the collection process has begun on their delinquent accounts.
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