The United States has reached a record $1.13 trillion in credit card debt, according to a survey by Debt.com, with 35% of respondents reporting they have maxed out their credit cards in recent years. The survey, which involved over 1,000 adults, indicates that inflation and rising interest rates are primary drivers, with 45% of participants citing inflation-driven price hikes as the reason for their credit card usage. As living costs increase, many Americans are turning to credit cards to cover basic expenses, while nearly 9% acquired a card to handle unexpected financial emergencies.
Howard Dvorkin of Debt.com stated that the current economic scenario underscores the alarming escalation in credit card debt and the financial pressures faced by numerous Americans. The survey also reveals that millennials are disproportionately affected, with 31% of those holding $10,000 to $20,000 in credit card debt being millennials, and 13% of those with $20,000 to over $30,000 in debt also belonging to this generation. Dvorkin emphasized that while credit cards can offer temporary relief, rapid debt accumulation is unsustainable and can lead to long-term financial repercussions, urging caution and alternative financial strategies.
Additionally, the survey highlights how family and retailers influence credit card habits, with 32% of respondents saying their parents introduced them to their first credit card, 26% citing retail stores, and 12% pointing to schools or universities. Despite the concerning current data, historical trends from Debt.com show some improvement: the percentage of Americans maxing out credit cards has declined from 50.08% five years ago to 43% three years ago, and now stands at 35%. For more details on the survey findings, visit https://www.debt.com/research/credit-card-survey.
