Nearly half of all Americans are not paying off their credit card balances every month, according to the results of a recently released survey, and 72% of those people have a balance greater than $1,000.
And while most people sign up for credit cards to cover unexpected emergency purchases, many are using their cards for necessary expenses every month, such as medical bills (30%), groceries (51%), car repairs (39%), home repairs (24%), and child care (4%).
Half of the 72% of people who carry a balance on their credit card every month carry at least $5,000, according to the survey, which was conducted by Clever Real Estate.
Fewer than 30% of respondents believe they will be able to pay off their credit card debt within a year, while 35% believe it will take between two and five years to get out of debt. That can be a problem for many individuals, especially given that 73% of respondents were either “somewhat stressed”, “stressed”, or “very stressed” about their credit card debt. Only 27% were either “not stressed” or “not stressed at all” about the amount of credit card debt they had incurred.
Knowing how individuals are using their credit cards and their emotional state of mind relative to their debts can help collectors better understand the financial situations of individuals and provides more data to help individuals find ways to pay off their debts and remove that stress from their lives. Not paying off the balance every month can start a spiral of debt and financial problems for individuals, who are then forced to make larger monthly payments to cover the increased interest charged on the outstanding balance every month.