New research has revealed that American households struggling with debt or seeking financial counseling have average credit card balances of $20,112. The alarming figure is more than double the debt of the average household with credit card balances, and more than three times the average credit card debt of all US households.
The analysis by American Consumer Credit Counseling Inc (ACCC) found that the average American household seeking budgeting help has close to six (5.6) credit cards, with the majority of those cards charging hefty interest rates of around 20%.
The figures have raised concerns about the debt-to-income ratio (how much debt you have compared to how much you are earning) for many Americans, after ACCC found that the average household income was $54,687.
“America has a love affair with credit card debt – especially when the economy is strong and unemployment is low,” says ACCC’s President and CEO, Steve Trumble. “The consumers we work with provide a very clear picture of where the tipping point is for households in debt. When someone is looking for financial counseling, it is safe to assume they are struggling with debt and the numbers are pretty alarming.”
Credit card debt is rising
Debt burden is the leading cause of financial stress, says the analysis. Financial stress can rise when households feel overwhelmed by the amount of debt they have, they are struggling to make ends meet or they are trying to save for college, a home or retirement. A separate study by CompareCards.com found as many as seven in ten Americans have cried over their finances, with household debt (31%) and high-interest credit card balances (20%) being the primary causes.
A similar study by Northwestern Mutual found that 54% of consumers experience anxiety due to their finances, with money being a dominant source of stress for 44% of those surveyed. The majority of consumers (87%) said they were most happy and confident when their finances were in order.
We advise anyone concerned about the amount of debt they have to speak to National Debt Relief. An alternative is to take a look at the best debt settlement companies to help with your needs or the best debt consolidation companies to help you combine your debts into one monthly payment. You can also consider our feature on how to pay off credit card debt.