Credit card becomes the most popular payment that cannot be replaced easily. Moreover, digital era boosts this card into the top list as payment method to purchase at online store or transfer money abroad. Well, using credit card means you have debt to pay monthly plus interest. In his case, average US credit card debt rises significantly each year.
Before going further, you need to know why credit card creates debt. In general, you receive money as loan from bank or credit card issuer to pay anything. This kind of loan will be put into credit card account alongside its interest. When you pay or spend money, you do not take it from your saving. All payment sources are in forms of loans. As the loan goes higher, average US credit card debt will increase gradually. The loan creates debt and you have obligatory to pay at regular basis.
The Average Debt from Credit Card
For your information, Federal Reserve and U.S Census Report showed interesting information about this topic. Keep in mind that only less than 40 percent have credit card. It does not mean amount of people who spend via credit card are very small. Average US credit card debt only applies to person who becomes principal cardholder. As you know, one person may have more than two cardholders such as spouse, children, or family. However, he or she is principal person who signs contract or agreement.
Data showed that average US credit card debt was $5,700 in 2017. This data was valid for entire year in 2017. For 2018, debt is estimated to be more than $6,000 and percentage is higher from previous one. Several factors involve to increase or decrease debt by using credit card. There is age, location, gender, etc. Socioeconomic factor is primary reasons to explore more about this condition.
Each state in US has different average US credit card debt. However, all of them contribute significantly to determine result for ne country. Alaska is at top list for spending anything using credit card. One person has credit card debt for more than $10,000 and the smallest debt is in Ohio for less than $4,000.
How to Manage Credit Card Debts
How much average credit card debt will be at danger level? There is no definite number regarding how much debt you can have. As long as you can pay, there is no problem at all. Debt goes higher each years because more people spend to fulfill their needs and wants via credit card due to easy access and simple process.
In order to keep average US credit card debt and balance in check, several methods are suggested to apply. Firstly, create priority list before spending money via credit card. You do not have to worry as long as expense is less than income. Person with high income tends to spend more, but still capable to pay regularly. Balancing is primary thing to do in order to prevent late payment, even default or bankruptcy.