The average American household credit card balance as of the third quarter of 2024 was about $10,757 after adjusting for inflation, according to a new study.
The personal-finance website WalletHub on Friday released its new Credit Card Debt Study, which found that consumers added $21 billion in debt during the third quarter of 2024.
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I've been in deep credit card debt before and it's a pure bitch getting out. I swore the last time that I wasn't going to let it happen again and I've been successful at it - so far.
I've got one credit card for emergencies and I use it once every couple months to buy something just to make sure it doesn't get cancelled for non-use, then I pay it off in full as soon as it comes due. I haven't carried a balance over into the next month for a few years now.
Well, that's down from the $17k as reported about 15 years ago.
ReplyDeleteWith inflation, the amount is even less.
For years I have said that cancelling debt is like a 2nd paycheck. More money stays in your pocket.
ReplyDeleteThere is the argument that debt is a tool used for growing wealth. I think the average wage earner is not savvy enough to make that work.
Jeezuz, my old eyes with floaters and this phone -- I thought you wrote, "I think the average wage earner is not savory enough to make that work." Lord knows I'm not very savory. We're still clawing our way out of debt, but the end is in sight.
DeleteI also learned my lesson about credit cards years ago, only have one, and never carry a balance forward, either. In fact, before anything is charged on the card, the money for the payment is in the bank before the charge is ever made.
ReplyDeleteI use the credit card for most household bills and purchases because there's a point system attached to the card. The points that accrue can be cashed in for gift or debit cards. That's how I pay for most of my fishing gear purchases which allows me to have WAY better equipment than I otherwise could afford!
So we've all been burned bad by credit cards. I watched a youtuber (asksebby.com) explain how to turn the tables. But you have to work the math to make sure you're coming out ahead. I found an AMEX card that pays 6% in cashback on grocery store -not clubstores like Costco, but regular Kroger, Albertsons. That card is only used to buy food and getting back 6 cents on the dollar is helping a lot. I still buy the $5 chicken at Costco.
DeleteI can't seem to find a good deal on points back. Also note that Vets get special deals from some of the card companies. You have to spend the time to find the right one or you'll get screwed.
Having a large balance is a bitch to pay down, but I think its all perspective with what you used it for. I used mine to keep my grandmothers house out of foreclose than paying for 4 funerals in the last 5 years. Its a bitch but still will do it again even knowing what I was getting myself into.
ReplyDeleteI never buy anymore than I can pay off inside of a month. took a while to get it under control
ReplyDeletebut I did it. they handy for some things a debit card is not useful for. like renting a car. or some other weird shit. the banks make money hand over fist with credit cards.
got one with a 10 grand limit. that went into the woodstove ! never again.
we need to warn the kids about them before they get sucked into the banker trap !
ever notice that the card you get is always outside your state ? there a reason for that.
that way they can charge more than the prime rate. way more. state law doesn't allow them to do that inside your state. and that is WHY YOUR CREDIT CARD COMES FROM A STATE OTHER THAN THE ONE YOU LIVE IN. a very nice loop hole they use.
ask Joe about it. he help pass the damn law back in the 1970's. dave in pa./
Also why so many of their home offices are in Delaware.
DeleteYou can only use debt to 'grow your wealth' when your money is invested into something with a higher return. It's a gamble that businessmen take all the time, especially a few years ago with interest rates near 0% - but they're not paying 20 - 35% interest, like your credit cards are charging. That's a killer.
ReplyDeleteI have two (2) “cash back” credit cards……
ReplyDeleteOne (1) card covers my monthly household expenses…..
like natural gas/insurance/power/etc…..
The other card is used for outside every day expenses…..
like car gas/groceries/etc…..
I get to reap the “cash back”…..by paying the cards off…..
every month and avoid the 19% interest….
Kinda Dave Ramseyish….
Ed357
It's just more evidence that most people are emotionally reacting, instant gratification driven to buying shit they don't need with money they don't have. My grandparents didn't have credit cards. They saved till they could pay cash.
ReplyDeleteJust wondering: does this 'average debt' include the people who pay off their card immediately every month? Technically those people do NOT have a debt, they just use the credit card as tool to pay (bills) with. Like me.
ReplyDeleteI'm with you, Henk. Neither a borrower nor a lender be.
DeleteI have 2 credit cards that get paid off every month. One card pays the TV service, all utilities, insurance, and a recurring household charges. The other is used to buy groceries and all other expenses as long as there is not a credit card upcharge. If there is a credit card upcharge I pay cash.
DeleteI hadn't paid a nickel in credit card interest for years then a few months ago the card balance at the end of the month, oddly, was listed as lower than the actual amount. So my payment was short, by about twenty bucks.
ReplyDeleteAfter the bank calculated the interest based on the entire months balance, the interest fee was about $32.
Since then I overpay the end of month balance by a hundred. Fool me once....
My 2nd divorce almost drove me into bankruptcy.. I used credit cards to get things paid for that couldn't wait until payday, including a lawyer and move back to my home state due to uncontrollable circumstances.. Of course one use leads to another and soon you're in a bad place... I sold almost everything I could, including blood and most of my firearms .. It took several years and lots of doing without to get free.. Today I have a hard time using one just because I know where it can lead..
ReplyDeleteIf you're caught in the net good luck in getting out
JD
All due respect, it sounds like you didn't learn anything from your first divorce.
DeleteYoung, dumb and full of you know what back then.
DeleteOlder, wiser and much less full nowadays
JD
With all due respect Elmo, sounds like he learned lots. He got into debt. Realized it was a trap. Fought tooth and nail to get out, and now stays out. What part of his story confused you?
DeleteNot confused, Anon @7:35. Just asking a question. I hope you weren't offended by it.
DeleteJD wasn't. He gave me an honest, heartfelt answer. All the best to him.
After my husband passed away, I got rid of all the credit cards and the debt associated with them, and I haven't looked back. I save up for what I want or do without. I have a much more comfortable standard of living now on my below-poverty-level retirement.
ReplyDeleteA very smart man told me to never pay interest on a depreciable item. That includes cars, boats, etc. A house is an appreciable asset, and so paying interest on it would therefore in his thinking be acceptable.
ReplyDeleteMy wife and I have not been in debt for almost 10 years or so. We have one credit card with a $500 limit. We only use it in cases of renting a car, or hotel room, etc. And pay it off when the bill comes. Our bank cards are both debit/credit cards. We use them to pay for things, and the money comes out immediately from our checking account.
Once you pay for your first car with cash, say $10,000 or so, you can't imagine ever paying a car payment again. With the way cars last today, it is not unreasonable to expect to get at least 200k miles on one.
I'll be 80 in the Spring; I've never owed a nickel on a credit card in my life. I bought a (used) car once which the dealer "financed." The 36-month term on the loan was paid off by me in just over 2 years. I've never bought another car with less than 100k miles on it - and I paid cash every time.
ReplyDeleteMore than once I've had friends/girlfriends who took it for granted that car payments were just overhead, like rent. Never could figure out why what was so apparent to me was such a mystery to them.
The future Mrs and I have no debt but the house and the car I had to buy.
ReplyDeleteMy ex used to bitch about money all the time and she had over $60,000 run up in credit card debt. She always wanted to fight about money.
The future Mrs and I are on the same money/spending wavelength and in the 14 yrs we've been together we now have a net worth of over $1.12 million.
It can be done. Follow the Dave Ramsey plan. We don't make a butt-load of money were just frugal. We drive Subarus because they wear like iron and can go anywhere you point them even in the snow. We invest with a guy that takes a set amount each month and we max out our 401K contributions.
We have financial security, a year worth of food in the basement (that's very comforting) and an arsenal that will enable us to hold off any sort of unfriendly people long enough for them to realize that looting us is a very bad idea.
Don't lose faith. You can do it. It starts with cutting up the credit cards.
I've been up to my ass in credit card debt in the past, but not in years. I do use a cash back credit card for a lot of purchases but it gets paid off every month.
ReplyDeleteI pay mine off every month. Done that for years. I'm still of the school if you can't afford it you shouldn't be buy it. I don't think I've ever made a payment other than if full.
ReplyDeleteCredit cards are THE worst example of usury. The interest rate is criminal.
ReplyDeleteYep.
Deletehttps://www.youtube.com/shorts/dFK_u8pDV3Q?feature=share
If you really want to stay out of debt, don't get divorced. Better, don't get married.
ReplyDeleteThat reminds me:
DeleteHow do you know when your marriage is over?
When your wife melts down her wedding ring and casts it into a bullet.
"I haven't carried a balance over into the next month for a few years now." That's a fantasy we hope to enjoy after clearing the cat's vet bills!
ReplyDelete