Average American Credit Card Debt: This is Getting Scary!

average american credit card debt

We live in a unique time where we have to deal with credit card debts…and as overwhelming as these debts are, we seem to have embraced them as the years go by.

Everyone is always looking to minimize, or even eliminate their debt. However, over the years this goal has proved to be a seemingly impossible task. Individuals who have a low income are usually left with no other option than to turn to credit cards in order to pay off their insurmountable bills.

The Average American Credit Debt

America’s credit debt is very steep. According to the government datasheets as well as statistics from Federal Reserve, each US household owes an average of $7,115 to various credit card companies.

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Most individuals may argue that 7 grand is not such a big figure, and that it’s better than the 5 or 6 figure amount. Given enough time, that amount can be paid off easily, right?

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Even though that may be the case, that figure is far from being accurate. It is imperative to pay attention to the credit card debts that are held by indebted homes, that is, households that have debts dating a number of months or longer.

There is a high probability you are among those households. If we focus on the indebted alone, the average credit card debt goes as high as $15,252. The worst part of this is the fact that these averages have been constant for more than three years now. This shows how adamant we are when it comes to paying off our credit card debts.

It is believed that we will likely owe this amount and even beyond in the year 2019. This is attributed to the painful fact that our average debt has never gone down, if anything it keeps shooting up. Our needs are constantly changing, and with that, the credit card debts keep piling and the years roll on.

In January 2009, the average American debt rose to an alarming $19,000. The crashed market had contributed significantly to the figure as the world went through a recession period. During this period, the economy significantly declined and up went the credit card debts.

There was an immense drop in debt by October that year until it hit the $15,000 mark. The debt has hovered around the mark ever since.

One may wonder, what really happened during that period? 

Is it possible that we suddenly became good at the art of managing our debts? And if this is the case, why did we stop at $15,000?

The sudden drop came about when banks decided to write off huge amounts of debt that were non-collectable. Off the charts, off the books, and the numbers came spiraling down. As you can clearly see, this “drop in debt” was nothing but an illusion.

But that does not mean that you have to accept living in debt for the rest of your life. It is possible to do away with those credit card debts that have been bogging you down for months or years now.

Even though some may argue that it is not possible to live a debt-free life, various methods have been established to accomplish this task. The biggest challenge we have now is the fact that we have embraced our ‘ever-in-debt’ situation that anything else is just but a mere dream.

Methods of Cutting Back Credit Card Debts

1. The Debt Snowball

This technique was made famous by Dave Ramsey. Ramsey is a renowned economics guru. The debt snowball is an efficient method when it comes to cutting down your credit debts without overwhelming yourself.

It entails paying one debt at a time. You are required to select a small debt and pay it off as you maintain minimum payments on the rest of your credit card debts. Once you are done with the small debt, move on to a debt that is slightly bigger. Keep paying off the debt, from the smallest to the biggest, until you are finally debt-free.

If you focus on debts in this particular manner, your confidence will be boosted. Furthermore, this method will enable you to be well organized. By the end of a few months, you will notice that your credit card debts have considerably reduced. As time goes by, you will have zero debts to deal with.

2. Do away with credit cards and use cash instead

The fact that you have a credit card does not necessarily mean that you have to use it. Lock all your credit cards somewhere safe. This will ensure you don’t fall into the temptation of unapologetically using them whenever the need arises.

You can always retrieve them during an emergency when you absolutely and positively need them. Unless it’s an emergency, keep them as far away from you as possible.

3. Cut back on unnecessary expenses

Most of us like to eat out, see new movies in theaters and have 900 HD channels to boost our morale. Even though these things seem essential, the truth of the matter is that they are both useless and expensive.

If you are really serious about getting out of debt, then you have to ensure you put your money towards that goal. Avoid exorbitant ventures as much as possible by cutting back on unnecessary things. Start cooking you own meals, have the patience to wait until your favorite movies appear on Netflix and terminate all channels except for the basic cable.

Doing away with these things will be hard at first, but if you are really determined to slash your debt then you will find no problem at all coping with your new lifestyle. This doesn’t mean you can’t have fun in life. You can still have fun, the only difference is that it shouldn’t be too costly.

These three tried-and-true methods have been proven to do away with credit card debts over time. Far too many people think that it is impossible to completely eliminate credit debts, but this is not the case. With determination and discipline, it is more than possible to live a debt-free life.

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