What is the Average Credit Card Debt in the U.S.?
According to a report released by the Bureau of Consumer Financial Protection in 2021, for consumers who held at least one general credit card with a balance, the average card balance was $5,000 at the end of 2020.
But what does that number mean exactly? And if your household debt is near — or even above — the average credit card debt, what steps can you take to start paying it down?
Total credit card debt held by Americans
In its 2021 report, the Bureau of Consumer Financial Protection revealed that total credit card debt in American households reached $926 billion in 2019, and went down to $811 billion during the second quarter of 2020, due to reduced spending during the pandemic and federal economic relief programs. By the end of 2020, total credit card debt in the U.S. went up to $825 billion.
What age group has the highest average credit card debt?
At the end of 2020, the credit bureau Experian reported that Americans between the ages of 40-55 had the most credit card debt, while those over 75 had the least.
What counts as credit card debt?
Mortgages, auto loans and student loans are not considered credit card debt, but some kinds of debt are counted as credit card debt even though they’re not attached to a credit card account.
Beyond standard credit card debt, such as an everyday credit card account, consumer finance accounts also fall into this umbrella of “credit card debt.” Consumer finance accounts can be thought of as loans extended to consumers on behalf of a company. For example, furniture stores and payday loans fall may within this category.
Tips for paying down credit card debt
The good news about credit card debt is that it is possible to manage, and there are countless examples of people who have successfully paid off their debts. Here are some tips for managing your own credit card debt.
Set a goal. Is your goal to pay off one or more credit cards, or to get out of debt completely? Figure out what that goal is, and write it down, along with an achievable timeline for being successful.
Stick to a budget. A budget is critical to helping you get out of debt. Make sure that your budget is realistic and takes into account your needs, as well as those of your partner or family. You’ll need their help and buy-in if you are going to make this work.
Create a payment plan. To help you create a realistic plan for paying off your card or cards, utilize an online payoff calculator to help you visualize how much of a monthly payment you can afford, and when your payoff date will be if you chip away at your balance consistently. If you have multiple debts to repay — that carry different interest rates — focus on repaying the higher interest rate debt first, to reduce the total interest you’ll pay.
Don’t be ashamed. Like you, the average American struggles with debt.
How to get help with credit card debt
Sometimes individuals who are struggling with very serious debt cannot make their minimum required payments. In that case, consider contacting a credit counselor to lean about debt relief options.
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