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What is Unpaid Credit Card Debt Costing You?

Roughly 15 million Americans carry balances for at least two years, leading to higher total costs.

A new study from found that nearly half of U.S. credit users carry balances for at least two years. Roughly 29 million Americans use credit cards, which means about 15 million cardholders carry unpaid credit card debt. That adds up to big revenue for credit card companies, with so many opportunities to apply interest charges. But it’s not good for consumers.

Older cardholders are more likely to have older debt

Seniors hold on to more unpaid credit card debt for longer

You might think that Millennials (age 18-34) would be the worst about paying off their balances quickly. You’d be wrong. The study found that the most likely generations to carry unpaid balances were Baby Boomers (age 63-71) and the Silent Generation (ages 72+). According to the survey, 63% of Boomers carry balances long-term and 57% of the Silent Generation do, too.

That’s a problem, considering most of these age groups are in retirement. If those credit users are not working, then they’re working on a fixed income, often through Social Security benefits. Carrying credit card debt month after month does not do their fixed budgets any favors.

What’s the cost of unpaid credit card debt?

Let’s say you have $2,000 in unpaid credit card balances at an average interest rate of 15% APR. Your credit card has a standard minimum payment schedule that equals two percent of your balance.

  • On minimum payments, this debt would take 210 months (17.5 years) to pay off. Total interest charges would come out to $2,517.67. This more than doubles the cost of your debt.
  • To pay off the debt in two years, you would need to make $100 fixed payments each month. This would reduce your total interest charges to $315.89.
  • If you could afford to make $200 fixed payments, you would be out of debt in 11 months. Total interest charges would drop all the way to $150.06.

The longer you allow unpaid credit card debt to linger, the more it costs you. That’s because the relatively high interest charges you see on credit cards add up quickly.


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At 15% APR, roughly half of each minimum payment you make goes to cover accrued interest charges. At 20% APR, that amount jumps to two thirds of each payment you make. So, not only do you stay in debt for longer, you throw money away on interest charges.

Finding a faster way to pay

If you only make minimum payments on your credit cards, you’re not doing your budget any favors. At the very least, you should try to add a certain amount of money onto the minimum payment amount each month. Even better, you should determine a fixed payment that you can comfortably afford to make. Then you make that payment consistently until your debt is gone.

If you have more than one credit card balance to repay, there are strategic ways to do it. If you focus on paying off the debt with the highest APR first, you minimize interest charges. You make the minimum payments on your other debts and devote all extra cash to the highest APR debt.

If you have limited cash for debt elimination, then start with your lowest balances instead. Each balance you eliminate gives you extra cash flow to tackle the next debt. This allows you to build momentum to tackle your biggest debts.

If you need help eliminating unpaid credit card balances, talk to a certified credit counselor to find a better, faster path to zero.

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