Having a credit card and not knowing how to use it wisely can land you in debt. There are some statistics about credit cards that might surprise you. For example, lots of people have a credit card, some even have multiple.
We already know, however, that as generations continue to change and grow older, they tend to change their spending habits as well. People are forced to go into debt because the cost of living keeps increasing.
There are modern aspects of credit cards, that if we were to unearth them, would knock your socks right off. Here are 9 credit card statistics you need to know.
1. Millennials’ credit scores have climbed four points over the past year.
Although most of these millennials feel compelled to spend money to compete with their friends, overall, a significant percentage are making smarter financial choices. The oldest millennial will be turning 37 years, so they are not kids anymore.
The media has managed to brandish them as money-killers, including everything from oil and beer to doorbells. Instead of everything that the older generation holds dear, these millennials would rather slay their poor financial habits. So let’s cut them some slack, shall we?
2. Three out of ten cardholders never redeem their rewards.
I mean, who doesn’t love credit card rewards? Whether they come in the form of gift cards, points, cashback, or miles, it is just bonus money that you get from spending. However, not every cardholder takes advantage of these rewards.
Here’s one of the statistics that might surprise you: three out of ten cardholders leave their bonus points to collect dust. These points could be spent on gas, food, travel, or even entertainment.
3. The average household with a revolving debt pays up to $904 in annual interest.
For a moment, pause and think about how that $900 could improve your life. How many bills could you pay off? How many dinners can that buy? Whereas this might not sound like an earth-shattering amount, for an average American family, this could go a long way.
This is why it is frustrating that an average household with a revolving credit card debt can pay this much in just interest every year. This is according to a Nerd Wallet 2017 survey and Harris Poll. To avoid this, send as much as you can to all your credit card companies to pay off your statements.
4. Consumers aged between 25 and 65 carry the most credit card debt.
Forget the millennials; consumers aged between 35 to 65 years of age have the most credit card debt. According to Experian’s State of Credit Report, the most affected age group is between 45 to 54 years of age.
It’s like they say: with more power comes more (financial) responsibility. However, the chances are that this age group is facing higher housing expenses, high costs of living, plus other dependents to support.
5. The Great Lakes and Midwest are home to some of the most responsible credit card users.
Where did you expect responsible credit cardholders to live? City centers where the cost of living is high? Rural areas where prices of living are low? Well, let us stop guessing because the winners are folks living near the Great lakes and Mid-west.
Iowa residents have the smallest average credit card debt, while Minnesota has the highest number of people with high average credit scores.
6. Up to 27 million Americans are putting medical expenses on credit cards.
With healthcare costs always shooting to the roof, most Americans are forced to put medical bills on credit cards and pay the balance slowly. Though it is often the case, using credit cards to pay bills should be the last resort. To avoid this, some medical offices offer in-house payment options.
Even if it comes with interest, it is usually less than your credit card’s APR. Never be afraid to negotiate terms on your medical bill. You never know when the lady in the billing department might be in good spirits and give you a discount.
7. The average American consumer carries 3.4 cards on average.
Yes, across all adults with credit cards, Americans top the list with an average of 3.4 credit cards per person. Generation Xers tend to go overboard with an average of 4.5 credit cards stacked in their wallets. On the other hand, Millennials have the fewest cards with an average of 2.4.
8. American households have the highest credit card debt.
According to the Federal Reserve data, 38.1% of American households usually carry credit card balances as of 2013. Credit cards have developed into a large industry in the U.S. This is partically because of the revenue generated from consistent credit card debt.
9. Unemployment is the leading cause of credit card debt.
In a recent survey of credit users, 14% of households were more likely to get into credit card debt if one of the family members was laid off from their workplace. This puts unemployment as the leading cause of credit card debt.
By the end of 2016, the study estimated the average debt per consumer to be up to $5,331 for individuals with at least one credit card. Across Americans, the average debt comes to about $4,094.
Conclusion
- Believe it or not, these statistics represent some of the realities of credit cards in today’s world. Which of these statistics was the most shocking to you? Consider these insights when thinking about signing up for a new credit card.