Credit Card Debt in the USA - USDTA

Credit Card Debt in the USA

Americans today depend far more on credit than they do on their savings, and credit cards are one of the most common form of borrowing in the US. Credit cards are a form of borrowing that it is relatively easy to obtain and which provides a convenient way of spending the borrowed money. Many people treat their credit cards as equivalent to cash, using it to make everyday purchases.

Credit card debt in the USA currently amounts to a total debt of about 962 billion dollars. The average credit card debt per credit card owning household is 14,750 dollars. This is the total credit card debt divided by the number of households with credit cards. Credit card penalty fees in the US add up to about 20.5 billion dollars a year.

Approximately 609.8 million credit cards are currently in use in the United States, with credit card users having an average of 3.5 cards each. There are about 176.8 million credit card users in the US. Every year, about 5 billion credit card solicitations are mailed in the USA.

Students are particularly likely to have credit card debts and they are also likely to have multiple credit cards. The average credit card debt of a new graduate is 4100 dollars, with about 20 percent of graduates having credit card debts of more than 7000 dollars.

Credit cards can be used wisely. They can provide a safer option for online shopping and they can be the most convenient method for paying for items in stores. Credit cards can provide a source of credit for use in an emergency, to cover a major purchase or simply to buy basic everyday items. The debt can be repaid immediately, before any interest charges are applied, or it can be repaid slowly, although this will be with the addition of interest that is often charged at a high rate. The borrower will be required to make minimum monthly repayments, with extra fees charged if a payment is missed. If the borrower only repays the minimum required amounts, credit card debts can take a long time to repay, which will result in large interest charges. Although credit cards can be very useful, these high interest rates can also become problematic. Large, quickly growing credit card debts can cause serious problems for many Americans. When credit cards are not used carefully, they can become very costly.

It is often possible to obtain better credit card interest rates by switching to a new credit card provider or by talking to the lender. Balance transfers to new cards are often granted a low interest or interest free period. Borrowers who want to stay on the same credit card can often obtain a better interest rate simply by contacting their creditor and asking for an interest rate reduction, as long as they are in good standing with their credit cards since the lender will be willing to give a better rate in order to retain their custom.

The average interest rate offered for a new credit card in the US is 14.73 percent, while the average APR for credit cards that are already in use and which currently have a balance on them being 13.67 percent.

More information about personal finances and the US economy can be found elsewhere on the usdta.org website.