Half of Americans With Credit Card Debt Added to It Last Year, Study Says

Financially, the average American family struggled through 2020. Millions faced joblessness, medical bills, delayed relief, and other hurdles that rippled through our bank accounts. As we look ahead, we’re also still collecting data on what exactly happened from March 2020 onward. A new study from CreditCards.com sheds a light on one alarming trend from the last year: credit card debt keeps going up.

CreditCards.com Debt Survey

According to the study, 51 percent of consumers with outstanding credit card debt added to it in 2020. CreditCards.com conducted a similar survey in May 2020 and found that 23 percent of adults had seen their debt grow. Nearly half of those surveyed – 44 percent – directly linked their debt to the virus. It’s no surprise that as the pandemic drags on, more and more people are forced to rely on credit cards to cover costs.

The study also found that millennials are in the worst position, as 56 percent of the cohort said they had gone deep into debt since March. As we found earlier in the year, millennials have been struggling with their finances since the early months of the pandemic.

On the bright side, however, most debtors remain optimistic about the future. Nearly two-thirds of respondents said they should be debt-free within 10 years, and about half plan to be out of debt in five years. However, that does leave 29 percent of debtors who said it would take them more than 10 years to get out, and seven percent that feels like they’ll always be in debt.

Debt Relief Strategies 

There are plenty of ways to combat your debt, and you can choose the best strategy for your own needs. A great place to start is Non-Profit Credit Counseling, as even low-income families can get a wholesale view of their finances. Counselors can also help you pick the best course of action, whether that be debt consolidation or a plan like the debt snowball or avalanche.

If you plan on consolidating your debt, Fiona is a free app that can help simplify the process. Fiona can help you find a reasonable debt consolidation loan after a quick 60-second application process. Loans range from $1,000 to $100,000 with interest rates as low as 4.99 percent.

You can also try budgeting as a tactic to combat debt. Apps like You Need a Budget and EveryDollar can help set you on the right track while also ensuring some of your money is going toward debt.

Additional relief may also be coming in the form of government aid, but it’s unclear exactly when that’ll come.

The Bottom Line

Thanks to the pandemic, the already existing American credit card debt crisis is on the verge of becoming a catastrophe. Credit card debt can become major financial baggage over time, and we recommend tackling it as quickly as possible.

See Also: How to Get Out of Credit Card Debt