Credit card cannot be separated from people’s financial lifestyle today. The fact that credit card can be accessed both by the rich and the poor; it enables people to have debt through their credit card. In one hand, it can be financial solution for people who want to buy something yet do not have sufficient cash at one time. On the other hand, it causes another problem which is fat credit card debt. This surely affects to the average American credit card debt. How much is the recent average of credit card debt of Americans?
According to some statistics, Americans have quite high average of credit card debt. However, this average also includes consumers who do not actually owe anything even though they hold credit cards. It is found that per household in America has credit card debt around $5,700. Meanwhile, the average American credit card debt balance is $5,551. This amount represents 30 percent of the available credit limit. This amount of money is pretty high, especially if the interest ranges from 15 to 20 percent.
In addition to average credit card debt of Americans, it actually depends on their geographic location. The average debt varies, ranging from $4,000 to $7,000 up. For example, Iowa has low average debt from credit card of $4,410. Meanwhile, the highest average American credit card debt is hold by Alaska with maximum amount of $7,552.
How Much Is Average Credit Card Debt Considered as High?
There is no exact method to determine whether credit card debt is considered as too much. In fact, using credit card is sometimes worthwhile. It all depends on your income, lifestyle as well as comfort level of paying a debt. Based on the average American credit card debt, it shows many households live with that much amount of debt. It is not a problem as long as the interest does not tangle them.
Some people prefer to make minimum payments, which force them to get rid of debt slowly. Problems possibly emerge from this case. If you cannot pay down the principle as quickly as you can, you will have to pay for the interest instead of the principle. As result, it will increase the average American credit card debt.
The other solution to solve your credit card debt problem is by transferring balance on the credit card. In case you do not have extra money to pay off the credit card debt, try balance transfer for your card. This comes with 21 months of interest free. Transferring the balance at 0 percent of interest allows you to pay the principal without adding the interest. This can be an easy way to reduce the number of average American credit card debt.
In conclusion, Americans have high average of credit card debt. With each household averagely owes $5,551, this number may bring some financial problem. While paying off the debt might be difficult, some smart solutions are needed. One of them is to pay down the principal to avoid average American credit card debt grows larger.