FILE – Consumer credit cards are posed in North Andover, Mass., March 5, 2012. The Consumer Financial Protection Bureau is expected to propose rules this week that further rein in banks’ ability to charge customers a fee when they overdraw their bank account. Opponents of the fees often cite the example of a $3 cup of coffee costing someone $40. (AP Photo/Elise Amendola, File)
(WWLP) – A new report from the Federal Reserve Bank of New York shows that total credit card debt in the U.S. has reached a record high.
As of December 2023, Americans collectively are holding $1.13 trillion in credit card debt. It’s a staggering number and one that is the highest in American history.
On average people are carrying credit card balances averaging over $7,900 and that’s up from an average balance of $6,321 during the same time period in 2022. 22News spoke to some local residents about what they think is contributing to this growing problem.
“Maybe just mismanagement or people don’t know how to budget,” said Tim.
Kim added, “I think people end up overspending, they pay for more than they actually make so they end up in debt and they can’t pay it off either.”
Jackie Lant of Springfield says a lack of financial literacy in early education could be a contributing factor to those struggling with debt. “I don’t know if back then they taught people about debt and credit cards and stuff like that… but I definitely know for my generation, we are not taught about how to handle it at all. I have a credit card and I’m not very good at handing it honestly.”
And even though credit card debt continues to climb, many Americans are contributing less every month to paying it off. According to New York Life, almost a quarter of those with credit card debt say they are now contributing less.
And whether it’s because of inflation, rising interest rates or other financial headwinds, it’s making it difficult for so many to try to chip away at their debt.
The good news is this same report shows that over 60 percent of people now say they’re adjusting their credit card debt management strategy.
Financial experts say the best way to get out of debt is to pay more than the minimum if possible because it’ll save you a lot of time, a lot of stress, and a lot of money in interest.
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