Credit card debt reached an all-time high of $786 billion at the end of 2017, up 6.7% from 2016 and topping the previous record of $737 billion in 2008, according to Experian data.
Is America's Credit Healthy?
The average American's credit card debt grew 3% last year, resulting in an average credit card balance of $6,354. A similar 3% increase also took place across retail cards, mortgage debt, and overall debt, suggesting perhaps consumers are feeling credit healthy about their financial stability. In fact, America's average credit utilization rate is 30%, the same as it was last year. Keeping credit utilization at 30% or lower is best for keeping credit scores high.
Are We Paying on Time?
While delinquency rates have crept up to 2.26% at the end of 2017, they are significantly lower than the 4.73% rate in 2008 when balances were $737 billion. That lower delinquency rate is a good indicator that people are not charging beyond their means and spending irresponsibly. Americans averaged less than one late payment per billing cycle in 2017 for bill payments.
How To Manage Credit Card Debt
Credit card lenders generally pay attention to how you spend your credit, when you pay your pills and how often you pay your bills. Paying your bills on time accounts for approximately 35% of your credit scores.
If you feel like you are struggling with credit card debt, try not to get overly stressed and research ways to take action:
- Credit Cards: Learn the Basics Before You Apply
- How to Get Out of Debt
- Debt Consolidation: Credit Cards and Loans
- Debt-to-Income Ratio
Every little amount that you can use to pay your bills can help towards gaining control of your debt and make you feel better.
Want to instantly increase your credit score? Experian Boost™ helps by giving you credit for the utility and mobile phone bills you're already paying. Until now, those payments did not positively impact your score.
This service is completely free and can boost your credit scores fast by using your own positive payment history. It can also help those with poor or limited credit situations. Other services such as credit repair may cost you up to thousands and only help remove inaccuracies from your credit report.