Credit Card Debt

How To Manage Credit Card Debt

Managing credit card debt can be difficult and complicated. Before coming up with a debt relief strategy that works for you, you should learn exactly how your credit card’s interest rate and fee structure works.

More to help you manage credit card debt

• Military Spouses and Credit Cards
• Should I Close My Credit Cards?
• Debt Snowball vs. Debt Wrecking Ball

Debt Relief Alternatives

When it comes to paying off your credit card debt, there are many ways to find debt relief including nonprofit credit counseling, bankruptcy, debt consolidation, as well as do-it-yourself debt repayment.

More debt relief alternatives to consider

• How to Organize Your Credit Card Statements
• Just Say No To Credit Card Convenience Checks
• How To Consolidate Credit

Debit Card vs. Credit Card

While debit and credit cards look identical today, they are not. There are differences in terms of purchase protections, overdrafts, fees and rewards program. Take a look at the pros and cons of each and see which is better for you.

More to help understand debit cards vs credit cards

• Signs You Have Too Much Credit Card Debt
• What Happens If You Stop Paying Credit Cards?
• Credit Counseling

How Many Americans Are in Debt?

Surveys conducted in 2021 say that 80% of American adults have debt in some fashion, which is not surprising given the fact most of us use credit to buy everything from homes to automobiles to a new pair of sneakers.

The truth is consumers are so accustomed to using credit to “buy now” and “pay later” that we are carrying the habit – and the resulting debt – into retirement. Nearly half of the people who retire bring some kind of debt with them. That can be dangerous. Trying to eliminate credit card debt, mortgage and auto loan debt when you are living on a fixed income, is very difficult.

Other debt numbers causing concern include:

• Mortgage balances, reflecting the appetite of Americans to own a home, grew an astonishing $230 billion in the third quarter of 2021. Americans now owe $10.67 trillion in mortgage debt.
• Credit card balances, which plunged $139 billion during the COVID-19 crisis of 2020 and Q1 of 2021, are on the uptick again. Credit card debt increased $17 billion in both Q2 and Q3 of 2021. Total credit card debt is $807 billion, which is still $123 billion lower than it was at the end of 2019.
• A 2020 survey by Experian showed Generation X (ages 41-56) accumulated the highest average credit card balance at $7,718. Baby Boomers (57-74) were next at $6,747, followed by Millennials (25-40) at $4,651 and the Silent Generation (75-and-older) at $3,988. Gen X also had the highest amount of non-mortgage debt with an average of $32,878, followed by Millennials ($27,251), Boomers ($25,812) and Silent Generation ($12,869).
• The days of buying a home when you’re young, staying there and paying it off over 30 years have changed. Americans over the age of 70 have run up $1.27 trillion in debt, a 614% increase over the last two decades, much of it coming in form of mortgages for retirement homes.