According to recent surveys and reports, credit card debt is a growing concern for many Americans. A survey by Clever found that 61% of Americans currently have credit card debt, with an average balance of $5,875. It's worth noting that credit cards are not only being used for luxury expenses, but also for essential living expenses such as rent, food, and utilities. In fact, 48% of credit card users rely on their cards to cover these basic necessities.
The survey also revealed that a significant portion of card users are struggling to make minimum payments, with 28% finding it difficult to do so. Additionally, 14% reported missing a payment this year. On average, Americans are spending $1,506 on their credit cards each month, equating to over $18,000 per year.
The uncertain state of the economy has heightened concerns among even cautious credit card users, with 31% of those without credit card debt worrying that they may go into debt within the next five years.
In the second quarter of 2023, Americans collectively accumulated over $1 trillion in credit card debt, marking a new high, as reported by the Federal Reserve Bank of New York. A survey by Quicken found that two in five Americans with credit cards are becoming increasingly dependent on them. Additionally, 35% of respondents stated that they would not be able to pay off their credit card debt by the end of the year, while another 35% expected to max out at least one credit card by the end of 2023.
To combat high interest rates and consolidate their credit card debt, many consumers have turned to personal loans. These loans offer lower interest rates than credit cards, allowing consumers to pay off debt more effectively. Personal loans can be paid off in fixed monthly payments, providing consumers with a clear understanding of their monthly obligations. The average interest rate for credit cards is 20.68%, while personal loans have an average rate of 11.48%, according to data from the Federal Reserve Bank of St. Louis.
Overall, credit card debt is a significant issue for many Americans. However, personal loans can offer a solution for those looking to pay off high-interest debt and improve their financial situation.