The average American credit card holder has a lot of debt

Nerdwallet says the cost of living has grown by 30 percent since 2003.
Author:
Updated:
Original:

This isn't exactly the thing you want to be reading on Christmas Day, but a report had shed light on the hefty debts being held on U.S. credit cards.

According to analysis by Nerdwallet, which looked at Federal Reserve Bank and U.S. Census Bureau data, the average household with credit card debt owes on average $16,061 on their cards.

This represents an 11 percent rise over the past decade, and rather than it being the result of Americans having a penchant for big purchases, they have increasingly been used to bridge the gap to payday.

Nerdwallet says the cost of living has grown by 30 percent since 2003 – driven by big hikes in medical costs and the price of food and drink – but during the same period, average wages have risen only 28 percent.

The study says that this gap means cutting credit debt isn't as simple as telling people to stop extravagant spending.

"On its face, the gap between 28 percent income growth and 30 percent cost of living growth might not seem very significant," it says. "But for Americans who have chronic health problems or live in cities with a high cost of living, the difference can be huge. It’s not surprising that debt continues to increase when it’s becoming harder to make ends meet."

The average household with credit card debt pays a total of $1,292 in credit card interest per year, the study found.

Holiday spending this year is expected to surpass $1 trillion in the U.S., a 3-4 percent rise on 2015, according to Forbes.

What about other debts

U.S. credit card debt totals $747 billion, according to the Nerdwallet study, but it pales in comparison to the amount Americans owe on mortgages, auto loans and student loans

The average household with a mortgage currently owes $172,806 on average, $8.35 trillion in total across the country.

People who took out auto loans, meanwhile, owe around $28,535 on average, while the millions of graduates need to fork out $49,042 to pay back their student loans.

If you're looking for ways to reduce your credit card debt, try out these tips from CreditCards.com and Real Simple.

Next Up

Screen Shot 2020-11-27 at 6.26.50 PM

Minnesota nurse's story about her battle with COVID-19 goes viral

A month later, Ashley Walter is on a hard road to recovery.

Adam Thielen

Report: Still on COVID-19 list, Thielen not expected to play Sunday

Thielen was placed on the COVID-19/Reserve list on Monday.

Image from iOS (19)

Mask-wearing, distancing a common sight on MOA's Black Friday

Thousands of shoppers were out and about on Black Friday despite the COVID-19 situation.

Tim Walz

Gov. Tim Walz, MDH react to record-setting COVID-19 deaths

Minnesota can expect further bad news over the coming weeks.

covid-19, coronavirus

Record 101 COVID-19 deaths reported in Minnesota

The figures are from Wednesday, with no update provided on Thanksgiving.

Screen Shot 2020-11-27 at 9.29.12 AM

Target reveals its 'Cyber Week' online deals

The sales will run from Nov. 29 to Dec. 5.

Minneapolis police

Mayor Frey, Minneapolis police chief reveal new 'no-knock' policy

The new policy for Minneapolis Police Department was announced Wednesday.

Teddy Bridgewater

Coller: It's a what-if Sunday with Teddy Bridgewater's return

Matthew Coller writes a weekly Vikings column for BMTN, with more of his work found at Purple Insider.

Ambulance hospital emergency

15-month-old girl's death being investigated by police in Fargo

The child died four days after being found unresponsive.

Related

The Tip Jar: The best cash back credit cards out there

If you're spending, you might as well get something back for it.

The Tip Jar: Why your credit score matters, and how to boost it

Want a mortgage? You'll probably need a solid credit score.

The Tip Jar: Are air miles credit cards worth it?

And are they better than frequent flyer miles?

Amazon takes aim at Target's RedCard with 5 percent cash back credit card offer

Amazon is taking its cue from Target by upping cash back rewards for its credit card holders.

Get your credit card out: Expect to spend $900 on gifts this holiday season

Twin Cities citizens are expected to spend a record amount this holiday season, forking out nearly $1,000 on gifts for their loved ones.

The price of happiness: Average MN wedding costs more than $25K

If you're planning on popping the question anytime soon, better get saving.

Rising number of Americans are struggling to pay off their student loans

1.1 million Americans defaulted on their student loans last year, putting them at the risk of penalties.