It’s not a secret that Americans owe incredible sums to credit card companies, but recently a new high was reached, according to CBS News, citing a report from the Federal Reserve. To be more specific, we’re talking about over $1 trillion, which tops the previous mark hit in April 2008, just before the Great Recession started.
“This should serve as a wake-up call to Americans,” said senior analyst Matt Schulz. “Even if you think that your credit card debt is manageable right now, you could be only one emergency away from real trouble.”
The debt is constantly growing
Of course, it’s worth mentioning that not all credit card holders in the United States carry debt each month, some of them even having savings accounts. However, when it comes to those who do, the average figure is $9,600 per household. Basically, this is 17 percent of the average household income in the country. Considering that the average interest rate is 16 percent, as well as 24 percent for those with subpar credit, some simple math reveals that this debt grows with up to $2,300 per year!
On the other side, despite this worrying numbers, most Americans are not worried about these issues, due to the country’s stable economy and low unemployment. But you shouldn’t rely on these as well…
As long as it’s possible, make sure you get rid of all that credit card debt and, if possible, pay your balance in full every month.
Credit card debt can be avoided!
The same Matt Schulz advises those who had credit card debt to also consider hidden charges, if they decide to postpone paying it completely.
Most issuers also have late payment fees, returned payment fees, as well as balance transfer fees and, finally, annual fees, all of these able to increase the total amount you own. In order to avoid them and rack up even more debt, make sure you set automatic payments from your card each month. This is a great start for getting rid of credit card debt!