credit card debt

Have you ever wondered what the average Joe owes on his credit cards? Would it be $3600 or $7743 or $5234? Yes, it’s true that when it comes to credit card debt, the average Joe is indeed a sly fellow. All the aforementioned numbers are from impeccable resources that define average credit card debt for Americans. As it is seen that the numbers vary greatly, so depending on the method in which debt is measured, people are either doing too well when it comes to managing their credit cards or are doing too bad. Although it seems that defining the average credit card debt among individuals is very simple but it is not as it seems to be.

Hunting for the average

The Federal Reserve that runs the entire national banking system is always looking for the average credit card balance. The Fed’s monthly G19 Consumer Credit Report, which is drawn from the bank’s lending reports, show that revolving debt of $880 billion in July 2014 was constantly disturbing the US economy. Divided by the US Census Bureau’s estimate of the total adult population in 013 of about 243.4 million people, the average debt amount comes to just $3600 each. However, the revolving debt category also includes finance company loans and bank loans apart from the credit cards and many people above 18 years of age don’t have a credit card. Adjusting for the fraction of adults who don’t have a credit card, the per person balance is $5,121.

Debt level among individuals seeking financial help seems to be higher

If you leave aside the hunt for the average Joe, there are groups that face their very own experience with credit card debt, which is rather useful to know. People who have sought for credit card counseling help in 2014 – which means that they’ve had faced extreme financial difficulties, had nearly 6 credit cards on an average and an unsecured debt of $17,548, as per the National Foundation for Credit Counseling, based on the experience of the member agencies. For this particular group, unsecured debt amounted to 50% of their total average income. Unsecured debt means debt in the form of credit card debt, payday loans and other debt backed by their property. Hence we see that looking for the average credit card debt among individuals means making some tough choices. It entirely depends on your philosophic approach on what you’re measuring and what you’re trying to do with it.

Be smart with your credit cards – Some tips to use your cards wisely

If you don’t want yourself to be counted among the hapless debtors of the nation, you need to become a responsible credit card user. Here’s how you can become one.

Know yourself and your spending habits: Before you fall into the trap of credit cards, you need to know yourself and your spending habits. Before you start shopping for a credit card, think about how you will use it and whether or not you can set some guidelines for yourself. A credit card doesn’t increase the amount of money that you have available to spend, it just helps you to buy things without cash, at times. It is like a loan and not like a grant.
Restrain the number of cards that you apply for: You might get a number of credit card offers from the issuers but before you fall into their trap, know the pitfalls of using multiple credit cards. Always use one credit card at a time so that you can use it and also repay the balance every month, without falling into debt.
Avoid impulsive shopping: If you’re an impulsive shopper, credit cards are not meant for you. Remember that you have enough money left in your bank account to buy things and credit card is not something that you can use for every item on which your eyes are set. An impulsive buyer is bound to incur debt.
Pay off your balance in full: Carrying balance from one month to another is a trademark habit of a debtor. Don’t forget to pay off the balance in full if you wish to avoid falling into the trap of debt. Although you can take out debt consolidation loans to get rid of debt, but it is better to be safe than sorry.
Keep checking your credit card statement: Credit card statements are not meant to be left unread in your mailbox. It is something that is extremely vital and that which should be checked by the credit card user to avoid any kind of future potential financial issues. If you find an error, report it to the credit card issuer right away.

Therefore, whatever the average credit card debt in the nation may be, every single individual is required to be a smart credit card user in order to erase this scenario of debt within the US. Follow the above mentioned steps and stay on top of your finances.

5 thoughts on “Average credit card debt owed by the Americans – Tips to be a smart card user

  1. Aside from the mortgage all other expenses need to be cash flowed and money put away. One of the reasons car prices are so high is that people will go into debt to buy them! Think about that for a bit. College education is way overpriced for the value it provides and since the government took over the loan programs tuition has sky rocketed since colleges know that the consumer will go into ridiculous debt to obtain a degree that earns $45K a year or no job prospects whatsoever.

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