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U.S. Credit Card Debt Reaches New High—Here’s How to Stay on Track Financially

June 25, 2018 By Green Dot Leave a Comment

Are you currently carrying a balance on your credit cards? If so, do you have a plan to get rid of that debt?

A January 2018 report from the Federal Reserve highlights the problematic debt that Americans are carrying. Revolving debt, which is primarily credit cards, hit a record high as of November 2017, reaching nearly $1.3 trillion.

This data underlines the importance of reducing credit card debt in order to achieve financial security. Credit cards typically carry much higher interest rates than other types of loans, which can quickly add even more dollars on top of what you already owe.

Learn about what the report’s findings mean for the greater economy, and then start taking steps to knock out your debt.

Revolving credit debt keeps growing

Revolving credit is any type of credit that you can keep using as long as the account is open and payments are made on time. In the case of credit cards, you can spend as much as you want, up to your given limit, and continue accessing more buying power every time you pay down the bill.

The previous record high for revolving debt was $1.021 trillion in April 2008, just around the onset of the recession. Based on current numbers, revolving debt at the end of 2017 is poised to be over $55 billion—more than it was in the fourth quarter of 2016.

Credit card delinquency is rising

The New York Fed’s November 2017 report notes that credit card delinquency rates have reached about 7.5%. On its own, this number is relatively in line with average rates, but when combined with massive student loan delinquency rates and an uptick in auto loan delinquencies, consumers must be careful about balancing debt.

Easy ways to protect yourself from debt

With total outstanding debt in the US at over $3.82 trillion, it’s time to take steps to reduce—and avoid—debt. You can try using these ideas immediately:

Build up your savings

Change your habits to prevent your debt from snowballing.

When you’re paying off debt, it can be hard to imagine having any extra money to put towards savings. However, the more you can save, the more you will have to cover yourself in the event of an emergency—this way, you won’t have to rely on borrowing money from credit cards or taking out loans. Make it a priority to save a percentage of your monthly income, even if you start small, so that you’ll have security in the future.

Switch to a reloadable debit card

If you enjoy shopping online, consider switching to a reloadable debit card like the Green Dot 5% Cash Back Visa® Debit Card that you can use anywhere Visa Debit is accepted in the US and earn up to $100 annually. Just load the card with cash, so that you aren’t buying things on credit. Plus, you can even use direct deposit to have your paycheck, government benefits, and even your tax refund loaded to your card. If you don’t have perfect credit because of debt, no worries—you won’t need a credit check to get a card today!

Resolving debt should be a priority for you in 2018, and you’ll need the right tools to do it. Pick up Green Dot’s 5% Cash Back Visa Debit Card and start taking advantage of our money management features. View Green Dot’s simple fees.

The information provided in this blog is for informational purposes only.  It should not be considered legal or financial advice.  You should consult with an attorney or other professional to determine what may be best for your individual needs.
This blog contains hyperlinks to sites that are not operated by Green Dot. The Green Dot Privacy Policy does not apply to the linked sites, and you should consult the Privacy Policies on those sites for further information. Green Dot does not provide and is not responsible for the product, service or overall content on those sites.

Filed Under: Everything Money Tagged With: credit card, debt, green dot, Green Dot Platinum, platinum, secured credit, secured credit card

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The views and opinions expressed here may not represent the views and opinions of Green Dot Corporation or its affiliates. It is presented for general informational purposes only and does not constitute tax, legal or business advice.

The Green Dot Blog may contain hyperlinks to sites that are not operated by Green Dot. The Green Dot Privacy Policy does not apply to the linked sites, and you should consult the Privacy Policies on those sites for further information. Green Dot does not provide and is not responsible for the product, service or overall content on those sites.

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