According to , nearly three-quarters (77%) of Americans own a credit card. quicken investigation.
In mid-December 2023, financial experts at Quicken, a popular personal finance software, shared the results of a study examining Americans’ relationship with their credit cards.
Research reveals that using credit cards is having a negative impact long term savings There are different demographics and many families struggle to live within their means.
Since credit cards arrived in the United States in 1958, we seem to have created a nation where many, if not most, Americans rely on credit cards.
Credit cards put Americans at odds with their beliefs
Quicken results show that Americans believe living within their means should be a priority. Yet Americans of all adult ages and economic backgrounds struggle to live within their means due to credit card debt.
64% of Americans say carrying a credit card balance is a bad idea. But 45% of Americans make ends meet, 51% earn between $50,000 and $90,000, and 36% earn at least $200,000.
Credit cards affect savings
There is a correlation between being highly dependent on credit cards and having little savings. middle class Young Americans also report that their savings would last less than three months if they lost income.
Still, Americans remain skeptical about credit cards. According to a Quicken survey, 71% of Millennials, 69% of Gen X, and 68% of Gen Z respondents feel that owning multiple credit cards can lead to overspending. Just over half of baby boomers felt the same way.
Credit cards harm your financial health at all income levels
81% of survey respondents believe they need to pay off credit cards more than maintain balances, while 45% of Gen Z and Millennials say their balances have steadily increased over the past 3-5 years. It says that there are.
These issues affect consumers of all income levels, including those with annual incomes of more than $200,000. As mentioned earlier, 28% of survey respondents admitted that their savings would not last them more than three months if they lost their main source of income.
Credit card debt is increasing
According to the second quarter data, federal reservePersonal credit card debt increased by $45 billion in 2023, reaching $1.3 trillion from $986 billion in the first quarter of 2023.
of Federal Reserve Board Report As of May 2023, credit card interest rates averaged 22.16% for accounts with interest-bearing balances. This could put additional financial stress on people with large debts.
The increase in credit card debt is alarming, especially given the Federal Reserve’s recent efforts to raise interest rates to fight inflation. During inflation, federal reserve They tend to use rising interest rates to slow the economy and lower inflation.
In April 2023, the Federal Reserve released its 2022 survey results on the non-cash payment habits of U.S. consumers and businesses. According to the 2022 Federal Reserve Payments Survey, U.S. credit card payments grew by 6.2% annually, or approximately $26 billion between 2018 and 2021.
Most Americans own a credit card
according to Consumer Financial Protection Bureau Review As of October 2023, three out of four American adults have at least one credit card account, and approximately 4,000 companies manufacture credit cards. The top 10 credit card issuers account for 83% of all credit card debt.
According to a study by Quicken, 77% of Americans own a credit card. Half of those with annual incomes between $50,000 and $99,000 report using credit cards for most purchases and avoiding cash.
Most Americans are cautious about credit cards, but 66% believe that having too many can lead to overspending. Many Americans are stressed by owning and using credit cards.
“Even when we know what to do and what not to do with credit cards, we often make mistakes anyway,” Quicken CEO Eric Dunn said in a Quicken news release. “This suggests that many consumers feel they don’t have a choice. But credit card debt costs a lot of money, so increasing debt can have a huge negative impact on people’s financial health.” will affect you.”
Dan suggests inspiring advice By emphasizing the value of creating a budget and monitoring your spending to improve your financial health, you can reduce the negative impact of increasing credit card debt on your financial health and stability. “No matter who you are or how much money you make,” he says.
More than half of Gen Z and Millennials report a steady increase in their credit card balances over the past three to five years. Almost half of these Americans are middle class. More than 35% earn more than $200,000 annually.
This article was created by Media decisions Syndicated by Wealth of Geeks.