It’s a frightening reality about the state of American consumer debt that at the end of 2024, the Federal Reserve Bank of St. Louis indicated that Americans owe more than $1.21 trillion in credit card debt. This was up $45 billion from the third quarter of 2024 and was 7.3% higher than the same debt level in 2023.
Unsurprisingly, this means that many Americans are struggling with debt, and it begs the question of what can be done. Considering that the Federal Reserve Bank of New York indicates that over 10% of credit card accounts were more than 90 days delinquent, it’s time for new credit card strategies.
It’s Not Just Credit Cards
One of the most important things to remember is that Americans must contend with more than credit card debt. As of the end of 2024, there was over $1.804 trillion in outstanding mortgages, auto loans, and student loan debt in the wild as well.
Everything, including delinquency, went up between the third and fourth quarters of 2024, likely due to holiday spending, but it speaks directly to American spending being out of control. As far as credit cards go, what makes this frightening is that carrying the balance has to be looked at from the perspective of 60% of Americans holding a credit card balance, and the average interest rate is now topping 20%.
In other words, for every $100 an American owes on a credit card right now, it’s really $120, and this number just compounds every month, so the balance grows and grows. With this in mind, what can be done? First and foremost, there has to be something like the snowball method of tackling your balances, but also looking at how to keep your balance down once it is paid off.
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