{"id":45104,"date":"2023-01-21T21:17:30","date_gmt":"2023-01-21T21:17:30","guid":{"rendered":"http:\/\/www.brandon.ddtest.info\/multisite-test\/a-growing-number-of-americans-face-potentially-crippling-credit-card-debt\/"},"modified":"2023-01-21T21:17:30","modified_gmt":"2023-01-21T21:17:30","slug":"a-growing-number-of-americans-face-potentially-crippling-credit-card-debt","status":"publish","type":"post","link":"http:\/\/www.brandon.ddtest.info\/multisite-test\/a-growing-number-of-americans-face-potentially-crippling-credit-card-debt\/","title":{"rendered":"A growing number of Americans face potentially crippling credit-card debt"},"content":{"rendered":"<p> \n<\/p>\n<div>\n<p>Americans are piling on credit-card debt just as interest rates are reaching historic highs.\u00a0<\/p>\n<p>Multiple polls show American consumers sinking deeper into credit-card debt. A new survey from Bankrate, the consumer finance company, found 46 percent of cardholders <a href=\"https:\/\/www.bankrate.com\/finance\/credit-cards\/credit-card-debt-costs-more-than-ever\/\" target=\"_blank\" rel=\"noreferrer noopener\">carrying credit-card balances<\/a> from month to month, up from 39 percent a year ago.\u00a0\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr1_ab\">\n<\/aside>\n<p>A survey by NerdWallet, the personal finance company, found the average U.S. household <a href=\"https:\/\/www.nerdwallet.com\/blog\/average-credit-card-debt-household\/\" target=\"_blank\" rel=\"noreferrer noopener\">carrying $7,486 in credit-card debt<\/a>, a 29-percent increase from a year earlier. A third poll, from the personal-finance website GOBankingRates, found that 14 million Americans owe <a href=\"https:\/\/www.gobankingrates.com\/credit-cards\/advice\/jaw-dropping-stats-about-state-of-credit-card-debt-in-america\/?utm_term=incontent_link_5&amp;utm_campaign=1201500&amp;utm_source=yahoo.com&amp;utm_content=7&amp;utm_medium=rss\" target=\"_blank\" rel=\"noreferrer noopener\">more than $10,000<\/a> in credit-card debt.\u00a0<\/p>\n<p>Card balances are rising at a time when consumers may find it harder than ever to pay them down. Credit-card interest rates <a href=\"https:\/\/fred.stlouisfed.org\/series\/TERMCBCCINTNS\" target=\"_blank\" rel=\"noreferrer noopener\">hit 20 percent<\/a> in late 2022, according to the Federal Reserve, the highest level in nearly 30 years of tracking.\u00a0\u00a0<\/p>\n<p>To buy now and pay later is a classic consumer impulse.\u00a0\u00a0<\/p>\n<p>\u201cAmericans love their credit cards,\u201d said Matt Schulz, chief credit analyst at LendingTree, the consumer finance company. \u201cWe always have credit-card debt, and it is almost always rising.\u201d\u00a0<\/p>\n<p>The nation\u2019s collective <a href=\"https:\/\/www.lendingtree.com\/credit-cards\/credit-card-debt-statistics\/\" target=\"_blank\" rel=\"noreferrer noopener\">credit-card balance<\/a> totals $925 billion, according to LendingTree. That\u2019s just below the historic record of $927 billion, set in pre-pandemic 2019.\u00a0<\/p>\n<p>But surveys suggest the recent rise in credit-card debt is less about impulse buying and more about survival. American wages are rising: consumer prices are rising faster. Simply put, stuff costs more.\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr2_ab\">\n<\/aside>\n<p>\u201cWhen grocery and gas and utility costs are going up, it\u2019s not like you can cancel them like a Spotify subscription,\u201d Schulz said.\u00a0<\/p>\n<p>Over the past three years, according to a NerdWallet analysis, median income has grown by 7 percent, while consumer costs have risen by 16 percent.\u00a0\u00a0<\/p>\n<p>A <a href=\"https:\/\/money.usnews.com\/credit-cards\/articles\/survey-nearly-82-worry-about-their-credit-card-debt\" target=\"_blank\" rel=\"noreferrer noopener\">December survey<\/a> by U.S. News &amp; World Report asked consumers to give the main reason for their credit-card debt. The most common response was \u201cincreased costs coupled with insufficient income.\u201d Large numbers of respondents cited unexpected expenses, medical emergencies, job loss and car repair. Only one-tenth of those with credit-card debt blamed their balances on frivolous spending.\u00a0\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr3_ab\">\n<\/aside>\n<p>\u00a0\u201cThe pressure people are feeling from rising costs at the grocery store or gas pump, it creates this situation where people are using more of their income even though they\u2019re not consuming more,\u201d said Bruce McClary, a senior vice-president at the nonprofit National Foundation for Credit Counseling. \u201cThe things that they typically buy are costing more.\u201d\u00a0<\/p>\n<p>America\u2019s credit card customers fall into two camps. One group, large but shrinking, pays off its card balance every month. Card companies call those customers \u201cdeadbeats,\u201d a term laden with irony. Customers who carry no credit card debt don\u2019t earn much money for the card companies, because they don\u2019t spend much money for the privilege of carrying a credit card.\u00a0\u00a0<\/p>\n<p>The other group, smaller but growing, carries credit-card debt from one month to the next. In the U.S. News survey, 15 percent of respondents reported card balances of $10,000 or more.\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr4_ab\">\n<\/aside>\n<p>At current interest rates, a five-figure credit-card balance can cripple a household budget.\u00a0\u00a0<\/p>\n<p>A household with the average credit-card debt of $7,486, as measured by NerdWallet, and the average interest rate, 20.4 percent, would have to spend $695 a month to retire the debt in 12 months, according to an <a href=\"https:\/\/www.discover.com\/credit-cards\/calculator\/credit-card-interest-calculator\/\" target=\"_blank\" rel=\"noreferrer noopener\">online interest calculator<\/a>.\u00a0\u00a0<\/p>\n<p>And what if the family can afford only $200 a month? Then they will be paying off the balance for five years. By the time the debt is repaid, assuming a constant interest rate, the family will have spent $4,239 on top of the $7,486 they actually borrowed. And all of this assumes the family never uses the card again.\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr5_ab\">\n<\/aside>\n<p>Credit-card rates are rising along with interest rates generally. The Federal Reserve raised interest rates by more than four full percentage points in 2022, one of the most dramatic money-tightening campaigns in U.S. history, to tamp down inflation.\u00a0\u00a0<\/p>\n<p>The rate hikes pushed mortgage rates to their highest levels in more than a decade, around 7 percent.\u00a0\u00a0<\/p>\n<p>Credit card rates range much higher than mortgage rates. Lenders want to make a profit, and they issue cards to consumers with a wide range of credit scores, with an attendant risk that some customers will default on the debt.\u00a0\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr6_ab\">\n<\/aside>\n<p>As recently as 2016, average card rates hovered in the 13- to 14-percent range: high, but not like today. At the start of 2022, the average credit card came with a 16-percent interest rate. By year\u2019s end, the average topped 20 percent.\u00a0<\/p>\n<p>A large group of card customers \u201443 percent in <a href=\"https:\/\/www.bankrate.com\/finance\/credit-cards\/more-americans-carrying-debt-and-many-dont-know-apr\/#young\" target=\"_blank\" rel=\"noreferrer noopener\">one recent survey<\/a> \u2014 don\u2019t know how much interest they are paying.\u00a0<\/p>\n<p>\u201cI have several cards of my own, and I couldn\u2019t tell you the rates on any of them,\u201d said Sara Rathner, a credit-card expert at NerdWallet. \u201cWhen you pay your bills in full on time every month, it\u2019s not an issue.\u201d\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr7_ab\">\n<\/aside>\n<p>Lenders generally market credit cards less on interest rates and more on \u201crewards,\u201d offering perks such as small quotients of cash returned to the consumer on certain purchases, credits toward airplane travel, or \u201cpoints\u201d that might be redeemed for any number of goods or services.\u00a0<\/p>\n<p>\u201cWhen you look at the credit-card company marketing materials, what do you see? You see the rewards,\u201d said Rodney Sullivan, executive director of the Richard A. Mayo Center for Asset Management at the University of Virginia\u2019s Darden School of Business. \u201cThey\u2019re front and center, always.\u201d\u00a0<\/p>\n<p>Credit-card customers, too, tend to dwell more on rewards than rates. In the recent BankRate survey, 36 percent of cardholders cited rewards as the best feature of their card. Only 10 percent cited a competitive interest rate.\u00a0<\/p>\n<p>\u201cYou definitely see a lot of people get seduced by rewards, because they are seductive,\u201d Rathner said. \u201cAnd a lot of them are aspirational.\u201d\u00a0\u00a0<\/p>\n<p>Flight attendants roam airplane aisles, offering applications for cards that might one day yield a free first-class ticket to Rome.\u00a0<\/p>\n<p>\u201cHumans, by our nature, we love rewards,\u201d Sullivan said. \u201cWe love getting benefits.\u201d\u00a0<\/p>\n<p>Credit-card rewards can deliver meaningful benefits to the cardholder who makes a lot of charges and pays the balance off every month. Fail to retire the debt, however, and the game quickly turns against the player.\u00a0<\/p>\n<aside class=\"thehill-promo-link\">\n\t\t<a href=\"https:\/\/thehill.com\/policy\/finance\/3821809-six-ways-to-escape-the-pit-of-credit-card-debt\/\" class=\"thehill-promo-link__link\" target=\"_blank\" rel=\"noopener\"><br \/>\n\t\tSix ways to escape the pit of credit-card debt\t<\/a><br \/>\n\t\t<a href=\"https:\/\/thehill.com\/policy\/cybersecurity\/3819987-russia-expected-to-increase-cyberattacks-in-ukraine-war-to-little-effect\/\" class=\"thehill-promo-link__link\" target=\"_blank\" rel=\"noopener\"><br \/>\n\t\tRussia expected to increase cyberattacks in Ukraine war \u2014 to little effect\t<\/a><br \/>\n\t<\/aside>\n<p>\u201cThose rewards,\u201d Sullivan said, \u201care not going to be worth the 20-percent interest that you\u2019ll be paying.\u201d\u00a0<\/p>\n<p>\u2014<\/p>\n<p><em>Trying to escape the pit of credit-card debt?\u00a0<a href=\"https:\/\/thehill.com\/policy\/finance\/3821809-six-ways-to-escape-the-pit-of-credit-card-debt\/\">Here are six strategies to consider<\/a>.<\/em><\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/news.google.com\/__i\/rss\/rd\/articles\/CBMidWh0dHBzOi8vdGhlaGlsbC5jb20vcG9saWN5L2ZpbmFuY2UvMzgyMTc5OS1hLWdyb3dpbmctbnVtYmVyLW9mLWFtZXJpY2Fucy1mYWNlLXBvdGVudGlhbGx5LWNyaXBwbGluZy1jcmVkaXQtY2FyZC1kZWJ0L9IBeWh0dHBzOi8vdGhlaGlsbC5jb20vcG9saWN5L2ZpbmFuY2UvMzgyMTc5OS1hLWdyb3dpbmctbnVtYmVyLW9mLWFtZXJpY2Fucy1mYWNlLXBvdGVudGlhbGx5LWNyaXBwbGluZy1jcmVkaXQtY2FyZC1kZWJ0L2FtcC8?oc=5\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Americans are piling on credit-card debt just as interest rates are reaching historic highs.\u00a0 Multiple polls show American consumers sinking deeper into credit-card debt. A new survey from Bankrate, the consumer finance company, found 46 percent of cardholders carrying credit-card balances from month to month, up from 39 percent a year ago.\u00a0\u00a0 A survey by &hellip;<\/p>\n","protected":false},"author":1,"featured_media":45105,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[161],"tags":[],"_links":{"self":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/45104"}],"collection":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/comments?post=45104"}],"version-history":[{"count":0,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/45104\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media\/45105"}],"wp:attachment":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media?parent=45104"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/categories?post=45104"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/tags?post=45104"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}