Balances may become unsustainable with added shopping expenses.
While most consumers started the year in a good place when it comes to credit card debt, a new report from CardHub.com found consumer credit card spending soared in the second quarter of this year. Americans added a startling $32.1 billion in credit card debt from April to June of this year.
As a result of all this increased spending, CardHub’s experts predict U.S. consumers will finish the year with a net increase of $60 billion, which would put us above $900 billion in credit card balances by the start of 2016. The average household will have $7,813 in debt that they will need to pay off quickly to avoid the added cost of high interest charges. You can find more details, including helpful graphs that show account charge-offs and average household debt loads back through the Great Recession, in CardHub’s 2018 Credit Card Debt Study.
“Unfortunately that amount of debt isn’t something that most people can pay off even within a few months,” says Consolidated Credit’s President Gary Herman, “and on a minimum payment schedule you’d be looking at over $5,700 in interest charges by the time you could pay the balance off. That’s a risky proposition for most people’s budgets.”
Herman warns that consumers should be careful about taking on more debt, particularly in the next few months before the peak of the holiday shopping season. The winter holidays are statistically the worst time of the year for amassing credit card debt, so having high balances heading into the holiday shopping season can easily turn into debt problems by the end of the year.
“Most people end up ignoring their balances at a certain point during the holidays because they make a conscious decision that the holiday cheer is worth the added debt,” Herman continues, “but if you’re already starting out with high balances then you can be in a real bind by the time you get back to budgeting after the New Year.”
With that in mind, Consolidated Credit is encouraging consumers to check their credit card debt ahead of the holiday shopping season. If you see you have a large amount of debt hanging over your head already, don’t wait until after the holidays to look into options for debt relief. Call Consolidated Credit at 1-888-294-3130 or complete an online application to request a free debt and budget evaluation from a certified credit counselor. Together, you can find a solution that helps you eliminate credit card debt so you can regain control.