The average credit card debt varies by state, race, age, and education level. In addition, it takes many months or even years to pay off a balance. Although it is impossible to pay off credit card debt completely in a short amount of time, persistent effort and the right debt relief solution can make the process more manageable.
Credit Card Debt Average
In January and February 2021, the average credit card balance for residents of the United States was $6,569, according to data from LendingTree. This includes both bank and retail cards. This average varies by state. In some states, the average card balance was less than $6,500.
Although there is no “magic number” for credit card debt, it is important to monitor your spending habits and balances on a regular basis. If your credit utilization rate is high and your interest rates are high, you may be at risk of accruing a large amount of debt.
In this case, you should consider debt relief options such as a personal loan or balance transfer cards.
Despite the average credit card debt, it is important to note that many people do not pay the full balance on their accounts. A recent survey by Experian revealed that 75% of U.S. consumers had credit card debt at the end of their first year of the pandemic.
Moreover, the average debt per credit card account holder increased by 3% over the same period, while the number of people with a balance on their account increased by 31 million.
Tips on Credit Card Debt Average
Credit card debt is a huge problem facing many American households. According to a recent report from Experian, 75% of cardholders are carrying some balance. The average balance per card was $5,315 by the end of 2020, a decrease from $6,194 the year before.
But the problem isn’t only about the size of balances. Increasing your credit score is a good way to decrease the amount of credit card debt you have.
First, pay off the card with the highest interest rate first. Most credit cards have variable rates linked to the federal funds rate and the prime rate, and these rates usually increase after a couple of billing cycles.
The average credit card interest rate is currently over 17%, which is higher than virtually every other type of consumer loan. The rate could increase as high as 19% before the end of the year.
How Much Credit Card Debt Should the Average Person Have?
According to the latest statistics from Experian, the average American has $5315 in credit card debt. This is a healthy trend, given that most consumers are getting smarter about how they spend their money and are paying down their balances.
However, most people still believe that they can pay off their credit card debt in two years or less. A new survey from Inside 1031 has also shed some light on the topic. The survey revealed that more than 50% of U.S. adults carry a balance on at least one credit card.
It is important to understand that credit card debt is an ongoing process and that you must monitor your spending habits to avoid getting into trouble. Ideally, your credit card balances should be below 10% of your net income, which is your income after taxes and expenses.
If your credit card debt exceeds this number, it can be difficult to pay your bills on time. However, there are a few tips you can follow to avoid being in such a situation.
Credit card debt has become a pandemic, affecting many households in the United States. Those in Alaska, New Jersey, Kentucky, and South Dakota owe the most, while those in Iowa owe the least. LendingTree analysts studied the credit reports of 1 million consumers to find the national average.
Their analysis shows that the average card debt in each state was $6,579. The data are based on both retail and bank cards.
According to the Federal Reserve, the average credit card debt has grown to nearly $6,000 per household. This number includes people of all ages. Baby boomers and Gen Xers have the highest average debt, while the youngest consumers have the lowest.
Average Credit Card Debt Per Age?
The average credit card debt per age is $2,340 for cardholders younger than 35 years old. During these years, people often have their first credit cards with low spending limits. As they age, they start to pay off these debts and the average debt per age starts to decrease. By age 75, the average credit card debt per person is only $5,638.
While this may seem like a small amount, these people are entering the stage of life when they have to live on fixed incomes and are not as dependent on credit cards as they were during their working years.
In the latest Experian credit card debt survey, credit-card debt per age varies by gender and income level. Gen X carries the highest average credit card balance at $7,236. Meanwhile, adults 65 years and older have the lowest average credit card debt at $2,312.
Even though these demographics have different levels of debt, the average credit card debt per age is generally a positive sign.
I have given you a lot of ideas on credit card debt. What are you going to do? Get a plan to pay off the debt, pay all of it off or what> Please comment below.
The financial planning and investment habits of the Baby Boomers are often referred to as being Post-Millennials. And just like every other generation before them, they are now planning for their futures, retirement, and what to do with all that money they have accumulated
. If you are a Baby Boomer and want to come up with some financial planning strategies for yourself, the first step is to gather together all of your financial information. You will want to be able to calculate your debts, income, assets, estate, etc.
Make sure that all financial planning and investment plans are in place before you reach retirement age, as you may not be able to save enough money to support yourself if you have large debts, large investments, and/or high debt or asset ratios.
You may find that you will need to change your financial planning strategies if you plan to purchase a home, since most traditional mortgage loans come with adjustable rates. Be sure to discuss this with your financial planning advisor, since he or she may be able to offer some helpful advice on how to lower your interest rate.
Millennials Financial Planning
In addition, if you have a lot of student loan debt, consider refinancing to consolidate the debt into one payment with a lower interest rate. Lowering your debt will help you get out of debt sooner and will also help you manage your finances better once you are debt free.
Once you are financially secure, the next step in your Post-Millennials financial planning should involve setting aside some money each month to help you achieve your retirement goals. Start by creating a retirement plan that will help you invest for your future.
Open up a retirement account with a good interest rate, such as a 401(k) or Roth, and begin contributing today. It won’t be easy, and it will require sacrifice on your part, but you can make your nest egg grow while you live.
One way to accomplish a successful retirement is to use debt consolidation. By combining all of your debts into one monthly payment, you will pay less interest and more each month. Many consumers find that this combination of debt consolidation and retirement helps them achieve their financial goals faster.
Consider opening accounts with both debt consolidation services and a retirement plan, so that you have one loan and one monthly payment to worry about.
If you are debt free after your first five years of adulthood, you will not need to worry about any of these Post-Millennials Financial Planning tips. However, if you are carrying a large amount of debt after your first five years of adulthood, you need to take action quickly.
What Is the Financial Struggles of Millennials?
The millennial generation is facing unique financial challenges, especially those born between 1980 and 2000. College costs have increased significantly and millennials are struggling to pay for school while working.
These factors have strained millennials’ financial situations and contributed to the high level of student debt they face today. Millennials spend about twenty-three percent of their salary on housing, compared to the seventeen percent spent by baby boomers.
Despite multiple setbacks, millennials are still capable of reaching their full financial potential. Using financial education and advisory services, millennials can fill in the gaps in their financial knowledge and help themselves improve their financial situation
. Millennials must own their past financial mistakes and resolve to make better financial choices in the future. In the meantime, they must commit to making the best financial decisions they can now, while simultaneously avoiding making the same mistakes again in the future.
Millennials are the least loyal to their current financial institution. More than three-fourths said that they would switch banks within a year and 32 percent said that they had switched banks in the last two years. Although millennials prioritize saving for retirement, they have different priorities compared to previous generations.
Moreover, they use digital technology to manage their money. In fact, seventy-five percent of millennials said they would prefer to use a mobile phone app or an Apple or Google banking solution instead of a traditional bank.
Millennials are not good savers. They are often too busy to think about financial goals in the short run and are unable to save money for them. Most of them are under the impression that they can handle their own finances and are unprepared for future unforeseen circumstances.
This misconception is counterproductive for their financial future and could even result in bankruptcy. Ultimately, Millennials need financial assistance and advice.
Financial Planning Basics for Millennials
This is because it is common for people to carry a combined total of five to ten thousand dollars worth of student debt during their early years of adulthood. For many people, this student debt is unnecessary, and a great waste of time, but for others, this student debt can be a disaster.
In this case, you need to focus on your immediate goals and find a way to eliminate that debt once and for all.
One of the best ways to make sure that you are reaching financial freedom and are financially stable is to get started on the process immediately. Many people delay getting started with their financial planning because they fear the stigma attached to it.
However, this stigma has nothing to do with the fact that your financial planning needs to be done. It actually has everything to do with how much time you have available to accomplish your goals and achieve your dreams.
The most important aspect of financial planning for the Post-Millennials is to decide when you are going to retire. Many young adults dream of reaching financial independence at an early age so that they can start to enjoy the finer things in life like a vacation home, their own business, etc.
However, if you have plans to reach financial freedom sooner than retirement age, it might be a good idea to start saving now. A good retirement plan should include investing in mutual funds, stocks, bonds, or both to ensure that you will be able to live the lifestyle you have always dreamed of when you are no longer working.
One of the most popular methods for ensuring that you have enough money to live comfortably after you are gone is to create a living trust. This is especially useful for the one in the middle, as they don’t yet have enough income or retirement assets to live on until they are older.
A financial plan like this allows the person making the plan to use the money that is generated by the investments for their own living expenses, while also being guaranteed a steady stream of income.
In the past, creating a living trust was nearly impossible, but there are new online services that make it possible for anyone to create a living trust, complete with instructions and forms to walk you through the process.
This is one of the best ways to ensure that you have enough money for all of your financial needs after you pass on; it can also help you to avoid probate and debt collectors completely.
What Are Millennials Financial Goals?
Millennials are changing the way they view their career trajectories. They are often referred to as the “instant gratification” generation. They are determined to pursue their goals now and want to work for promising start-ups, run their own businesses, and maintain a work-life balance. In fact, millennials may not plan to retire in the next five years because they enjoy their jobs.
As they begin to make a nest egg, millennials should start thinking about their financial future now. Saving money early is important, as a millennial still has many years until retirement.
The low interest rates in savings accounts can result in money loss over time. It is imperative that millennials start setting financial goals early, so they can benefit from compound interest and save money. However, this is easier said than done.
One study by the Travis Credit Union emphasizes the importance of creating an emergency fund. A third of millennials surveyed said they wanted to save $1,000-$5,000 to help with emergencies
. While that sounds good, it’s important to remember that the recession has changed the behavior of millennials. Many of them are now more lenient with money than their parents did. In the past, they might have to cut back on dining out or scrap their vacations.
According to the Bank of America survey, millennial males and females have more positive financial outlooks. Sixty-five percent of male millennials said they would prefer to save for retirement than to drink pints.
Millennials are also more likely to use digital banking and prefer online accounts for their financial life. One-third of millennials also said they would cancel subscriptions to Netflix and pay off their student loans.
With the uncertain economy , your job, and the future then you have to plan. Financial Planning is important. Managing finances can be difficult.
A best financial apps or free financial planning apps helps map out the future. With a strategy and a financial plan helps reduce the mistakes. You make money and save money.
Some think with a financial planner near and involves investments and manage the investments. The long-term goals are the accumulating money, putting money aside for the future, college, and cash reserve. Financial Planning is good for younger adults and people in their 20’s.
A Good Rule of Thumb is to save 5 Percent a Year
The interest will build in your account, but you will be dealing with inflation. Figuring how Social Security will supplement your income. A 401 K can invest in a lot of different funds, bonds, and index funds. Lots of times you can avoid sales charges.
Try to avoid selling and buying transactions causing a lot of sales fees.
Dollar cost averaging is a good way to go thru the hard times of low market and high. They put aside a set amount each month and weather the roller coaster rides of the market swings.
I have given you a lot of information on financial planning. How are you going to use it? Get a financial plan, a financial advisor, or set goals. Please Comment below.
