Despite the total amount of credit card debt decreasing since the Great Recession, Americans are still drowning in it and addicted to credit. According to economic data published by the Federal Reserve, credit card debt totals nearly $850 billion – it dropped by $2.4 billion in February. Consumer debt is still a whopping $3.13 trillion and total personal debt has surpassed $16 trillion.
It seems that Americans are embarrassed by their credit card debt, even more so than any other personal facts about their lives, according to a new poll by the National Foundation for Credit Counselling (NFCC).
The study discovered that more than one-third (37 percent) were most embarrassed about their credit card debt and another 30 percent of respondents said they’d be embarrassed to reveal their credit score. Rounding out the five categories were weight (12 percent), bank balance (10 percent) and age (one percent).
“Since consumers revealed that the two facts they’d be most embarrassed to admit are related to credit, it is obvious that they are not comfortable with how they are currently managing their money,” said Gail Cunningham, spokesperson for the NFCC, in a statement. “The good news is that there are solutions available for those who want to take charge of their financial future. Since April is Financial Literacy Month, now is the ideal time for people to address their financial concerns.”
The organization noted that a large sum of credit card debt can indicate that a person is in a financial danger zone. With immense debts, late payments and exorbitant late fees, this can hurt a consumer’s credit report and credit score.
With a paucity of career opportunities, wages not keeping up with the rate of inflation and a rising cost of living, many continue to turn to their credit cards, homes and short-term loan options to pay off their monthly bills. This is causing a headache for individuals thinking about their personal financial situation, their future and their retirement.
The latest annual Gallup Economy and Personal Finance poll discovered that 40 percent are worried that they cannot pay off their current debt loads, 36 percent are concerned that they can’t pay their monthly bills and 16 percent are wary that they won’t be able to pay the minimum payments on their credit cards in retirement.
We reported earlier this month that some Americans are completely foregoing the concept of retirement in the future in order to maintain their standard of living, recoup the finances lost in the Great Recession and to pay off their heavy debt levels.
In order to get rid of credit card debt, most financial experts suggest the following:
- Pay off the credit card with the lowest balance first
- Establish a monthly budget and analyze your expenses
- Slash your non-essential spending
- Delay monthly savings in favor of paying off credit card debt
- Consider a part-time job, selling your stuff and/or downsizing your lifestyle
The NFCC online survey was conducted with 2,168 respondents between Mar. 1 and Mar. 31.