According to a new study by personal finance website, Wallet Hub, the average Florence, SC household's credit card debt was $10,390, which was an increase of $2393. This makes Florence, SC among the top 1% in the credit card debt increase, by city. This data was collected from the most recent US Census.
Below is a breakdown of key findings, and a Q&A with Wallet Hub CEO, Odysseas Papadimitriou.
Read more here: https://wallethub.com/edu/cc/credit-card-debt-study/24400/
Key Findings and Q&A with WalletHub CEO Odysseas Papadimitriou
- Key Findings: Expect a debt-driven 2020. WalletHub projects that consumers will rack up another $85 billion in credit card debt during 2020 and approach $1.16 trillion in balances owed by year’s end.
- Money problems make us moody. More than 4 in 10 people (44%) say credit card debt makes them feel stressed. Roughly 11% of people say credit card debt leads to feelings of depression.
- Recession fears vary by political party. 2X more Democrats than Republicans think another recession will happen within one year.
- The bill will come due for millennials. Young people are 27% more likely to go into credit card debt for frivolous purchases than people over the age of 59.
- Millions would bare-all before exposing their finances. Women are 48% less likely than men to be embarrassed by people seeing how much credit card debt they have.
- Balance transfer offers are still attractive. The best balance transfer credit cards currently offer 0% APRs for the first 15-21 months with no annual fee and balance transfer fees as low as zero. Such deals likely will not be around for too much longer.
- Desperate times breed desperate measures. More than one-third of people (37%) say they would do anything to get out of credit card debt. Millennials are 3X more likely than baby boomers to agree to house arrest for a year in exchange for credit card debt freedom.
Q&A with WalletHub CEO Odysseas Papadimitriou
What do the latest credit card debt statistics tell us about U.S. consumers?
“The $77 billion in credit card debt that U.S. consumers added to their tab during 2019 pushed outstanding balances to a record high, at $1.07 trillion. Add fears of a global pandemic to the mix, and it becomes all too clear that we are in a very unhealthy, precarious position concerning revolving debt at the household level and perhaps the economy overall,” said WalletHub CEO Odysseas Papadimitriou.
How will credit card debt levels look after 2020?
“U.S. credit card debt will increase by an estimated $85 billion in 2020, according to WalletHub projections. That would push the average household’s balance to $9,755 and bring our collective credit card debt to roughly $1.16 trillion,” said WalletHub CEO Odysseas Papadimitriou. “Credit card debt levels are so high now that even a big increase can seem like a drop in the bucket. For context, $1.16 trillion is roughly three times as much as the federal government will spend on net interest payments toward the national debt this year.”
What impact will the Fed’s recent rate cut have on credit card debt?
“Most credit cards have variable interest rates that are indirectly tied to the Federal Reserve’s target rate. When the Fed’s target goes down, APRs on existing credit card accounts also tend to drop a bit. But because regular credit card rates are already so high compared to other types of debt, a Fed cut or two certainly won’t be enough to solve the credit card debt problem,” said WalletHub CEO Odysseas Papadimitriou. “People with credit card debt who have managed to maintain good or excellent credit should try to take advantage of 0% APR balance transfer credit card offers while they still last. That is one of the best ways to make a major dent in your debt in a relatively short period of time.”
What advice do you have for people trying to get out from under credit card debt?
“The best thing for people with credit card debt to do is make a plan. Determine the maximum amount that you can contribute to monthly debt payments and what your ETA to debt freedom will be as a result. Interest on credit card debt compounds daily, usually at a high rate, so it will become more and more expensive the longer you wait,” said WalletHub CEO Odysseas Papadimitriou. “It’s also important to reevaluate not only your expenses, but also your streams of income. The earning side of things often gets lost in discussions about debt.”