Credit card debt creeping up nationwide
There is concern growing that the increased use of credit cards along with rising interest rates may lead to higher debt.
"Basically half of credit cardholders are carrying expensive credit card debt, and the average, according to Experian is $5,525," Ted Rossman, senior industry analyst at Bankrate.com said.
Rossman said new data from the Federal Reserve Bank of New York indicated a slight drop in consumer debt, but it followed three-quarters of steep rising debt.
He said Americans had been doing a good job of paying down debt during the pandemic, largely because of reduced spending and stimulus money.
But now, more people are spending, and keeping up with inflation has put a strain on household finances.
"I don't want to use it anymore but sometimes you have to," said Josie Corcino of West Palm Beach referring to using a credit card.
Rising interest rates are also forcing credit card balances to rise.
Rossman said he expects credit card rates to reach — on average — near 19% by the end of the year.
He recommends consumers try to transfer balances to zero-rate cards.
"Don't just kick the can down the road," Rossman said. "Don't treat it as a shell game to move money around because if you only make minimum payments, you'll have a lot left at the end of the term, and then the interest rate skyrockets."
He advises taking the balance and dividing it by the number of zero rate months to come up with a monthly payment to pay off debt.
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