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Only Half Of US Credit Card Customers Believe They Can Pay Off Their Holiday Bills

According to the LendingTree Credit Card Confidence Index, a monthly survey published since 2018, only half of America’s credit card customers believe they’ll be able to pay off their December balance in full as we come out of the holiday season. 

The nationally representative survey received data from 1,514 cardholders, with only 51% stating they could pay off their December card balance this month; a 7% drop from the previous month. 

The current national credit card balance stands at $1.08 trillion which is a record high, and the average interest rate has reached 21%. This is the highest point recorded by the Federal Reserve in about 30 years of tracking, according to reports from USA Today

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“It was hard to imagine that growing debt, rising inflation and sky-high interest rates weren’t eventually going to take a toll,” said Matt Schulz, LendingTree’s chief credit analyst. 

In another periodic survey by Bankrate, it was shown that 47% of cardholders carried debt from month-to-month in mid-2023, which is up from 39% at the end of 2021. According to a TransUnion report for the third quarter of 2023, the average credit card holder has about $6,088 in debt. 

USA Today also reported that Wells Fargo Economics found that credit card debt is rising faster than any other household debt. 

“I think all this adds up to more people carrying more debt for longer periods of time, and unfortunately, I don’t see any of that reversing any time soon,” said Ted Rossman, a senior industry analyst at Bankrate.

The LendingTree index also showed that only 40% of women expressed confidence in their ability to pay off their card balance, compared to 64% of men. Across the five years of this specific survey, women have always voiced less confidence. 

Schulz theorized that “women may take a little bit more conservative approach to their finances. Men may be a little more confident than they should be, while women may be a little bit less confident than they could be.”

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Catherine Valega is a certified financial planner located in Boston who specializes in the finances of women. She offered the opinion to USA Today that female consumers may feel extra stretched out financially during the holidays due to the traditional roles that women filled in the household throughout history. That pressure is still very much present today, and has been passed down from generation to generation. 

“Women tend to want to give gifts, and they also tend to manage the stuff in their households. Who doesn’t spend more at year end,” Valega stated

Bankrate’s Rossman suggested that individuals with debt on a high-interest card should consider transferring some or all of their balance to a zero-APR card. Those cards typically give holders 15 months or longer of zero interest rates on their payments.

“If you use one of these properly, you can save a ton of money on interest,” Rossman said.

Valega stated: “Cardholders can also benefit from a few simple rules in using their cards. One is to charge only as much as you can afford to repay that month. Another is to set up automatic payments on the card. Better still if you can select the option to auto-pay the entire balance at month’s end.”