Credit Card Debt Can Make You Sick
Feb 21st, 2018 @ 10:15 PM by Amber Nelson
Americans have spent themselves into more and more credit card debt over the past decade and a new survey finds that all that debt may be hurting more than their bottom line.
A survey commissioned by NerdWallet on the psychology of credit card debt, found that 2 out of 5 credit card borrowers feel debt has affected their general happiness and 1 in 3 claiming it negatively affected their standard of living. And a full 20% even said that credit card debt had negatively impacted their health.
“Setting a realistic goal to work toward paying off your credit card debt, such as making an extra payment every month, can help you stay on track without feeling overwhelmed,” said NerdWallet credit card expert Kimberly Palmer. Presumably, the overwhelming stress of having to pay off debt it what causes a decline in health for some borrowers.
Total outstanding U.S. credit card debt had reached an all-time high as of 2017 with over $1 trillion in charges, according to the Federal Reserve. And credit reporting agency Experian says that the average American owns three credit cards with a total balance of $6,375, a 3% increase from the year before, according to their annual study on the state of U.S. credit and debt.
Data from the American Bankers Association shows that 43% of credit card borrowers carry a balance each month, meaning that almost half of card holders are racking up steep interest charges. The average credit card interest rate is 14.87%, resulting in about $904 in interest each year for the average U.S. household. For many borrowers, paying off an extra grand every year can definitely pile on the stress.
All the credit card spending does not appear to be wanton shopping sprees. The cost-of-living has risen consistently over the past ten years, but household income has made only minuscule increases until recently. Many Americans have turned to credit cards to make ends meet. Hopefully household incomes will continue to gain ground, allowing these over-stressed borrowers to finally be able to catch up.
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.