The Average American Has This Much Credit Card Debt. How Do You Stack Up?

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  • In the third quarter of 2021, Americans had $5,221 in credit card debt.
  • Most credit cards have high interest rates, so you'll continue to be charged interest if you carry a balance, and your debt can quickly grow and become a bigger problem.
  • Even if you have a lot of debt, you can pay it off, and one strategy that can help is to transfer the existing debt to a balance transfer credit card to save on interest.

In 2022, Americans had $841 billion in credit card debt.

Unfortunately, it's not uncommon for Americans to have credit card debt. This type of debt can create financial hardship because it's high-interest debt. As a credit card balance rises and interest charges pile up, tackling the debt can be more challenging. How much credit card debt does the average American have? It may be more than you realize.

The average U.S. household has $6,473 in credit card debt

Many Americans use credit cards to pay for purchases, and it turns out many have outstanding account balances. According to data from Experian, the average American's credit card balance in the third quarter of 2021 was $5,221.

The Ascent examined research on American credit card debt and found that Americans had $841 billion in credit card debt in 2022. When considering the most recent U.S. credit card debt statistics and household data, the average American household has about $6,473 in credit card debt.

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While it can be convenient to use credit cards, it's risky to carry a balance. Unless you have a 0% APR credit card, you'll be charged interest on your unpaid debt, and your debt will continue to grow until you pay it off. Plus having significant debt can hurt your credit score.

Three tips to pay off your credit card debt

If you're among the masses of Americans struggling with credit card debt, you're not alone. Even if you have a lot of it, you can get out of credit card debt. Here are a few tips that may help you pay off your credit card debt faster:

1. Figure out how much debt you have

If you have credit card debt, it's best to be honest with yourself. While it can be upsetting realizing that you're in a difficult financial situation, it doesn't benefit you to ignore your debt. It will only continue to grow as you ignore it.

To pay off your debt, you'll need to be aware of how much debt you have. Now is a great time to sit down and calculate your total debt. Take note of each card's balance and interest rate. Doing this will make it easier for you to create a debt payoff plan.

2. Focus on the highest-interest debt first

The debt avalanche method can help you save on interest charges when paying down debt. With this debt payoff method, you'll focus on putting more money toward the highest-interest debt. While following this strategy, you'll want to continue making at least the minimum payment amount on all of your credit cards. By putting extra money toward the highest-interest credit card, you will save money in the long run.

3. Consider using a balance transfer card to save on interest

If you have a lot of outstanding debt and it feels overwhelming, you may consider applying for a balance transfer credit card. Many of the best balance transfer credit cards offer a 0% interest rate on balance transfers for 18 months or more, which gives you time to pay off the entire balance without paying additional interest charges.

You'll be charged a balance transfer fee to transfer your existing balance. These fees typically range from 3% to 5%. If you're transferring $7,200 in debt and are charged a 5% balance transfer fee, you'll pay $360 in fees. But that's not a bad price to pay for 0% interest. With the transferred balance plus the balance transfer fee, you'll have $7,560 in debt to pay off. If you pay $420 monthly for 18 months, you can pay the entire debt off in a year and a half.

Don't ignore your debt

Don't be embarrassed about your credit card debt. But make a plan to pay it down as quickly as possible so you don't continue to pay expensive credit card interest. You'll be more able to focus on other financial goals once you eliminate your credit card debt. For additional money management tips, check out our personal finance resources.

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