Study Finds Average U.S. Household Has $8k+ in Credit Card Debt
It’s sad to say that, for many Americans, credit card debt is just a fact of life. Currently our total outstanding credit card debt tops $1.03 trillion dollars. What’s more it seems that attitudes toward debt continue to evolve, leading the majority of adults to admit they’d take on debt for a frivolous purpose.
According to WalletHub’s latest credit card debt survey, 62% said that there were frivolous purchases worth going into debt for. Meanwhile Millennials were 35% more likely to be led into temptation than adults over the age of 45. Incidentally 12% of those surveyed say they don’t even remember what they purchased that landed them in debt.
To be fair not everything respondents said they’d go into debt for was so frivolous. For example, with 61%, the top response when asked what types of purchases were “debt-worthy” was health care. That was followed by housing and travel, which 46% and 37% of American described as debt-worthy respectively. Other ranking responses included electronics (17%), clothing (16%), dining (14%), and entertainment (11%).
Elsewhere in the report it was revealed that the average American now has $8,788 in debt and that more than one-third say having credit card debt feels normal. As Baldwin Wallace University finance department chair Kevin Jacques explains, this may actually signal a societal trend. Jacques told WalletHub, “One of the things that has happened over the last 30+ years is that American consumers have become much more accepting of having debt than previous generations.” However he went to note, “Many people view debt, in general, and credit card debt, in particular, as a last resort.”
The good news is that many Americans say they’re working towards becoming debt-free. For 26% of respondents, that path includes trying to refinance their credit card debt. Also encouraging is that 91% of those surveyed said they anticipate having less debt by the year’s end. Moreover 41% say they’ll pay off their credit card debt within the next year with another 26% expecting to pay it off before two years are up.
Based on these figures, the one-third of respondents who said having credit card debt is normal may technically be correct. Nevertheless this doesn’t mean we shouldn’t continue taking steps to change that. Luckily it seems that a good number of Americans are now making progress in their quest to conquer debt — whether by refinancing or just focusing on their payments. Still, until our society stops valuing the frivolous, the $1 trillion we owe in credit card debt is unlikely to go anywhere anytime soon.