Tough Times: The Average American Has Over $3,000 in Credit Card Debt
NEW YORK – Most Americans currently carry so much credit card debt that they would do anything to turn back time and change the outcome of their financial situation.
That’s according to a recent survey of 2,000 adults that looked at how they tackle their financial barriers. The survey found that the average person owes $3,083 on their credit cards. Many respondents shared their financial regrets over the years, of not having a retirement plan in place when they were younger (51%), of not paying close attention to their credit score (43% ) and for having bought goods that were too cheap (41%) .
Three-quarters (76%) have made an average of five financial decisions they regret over the past five years. The same percentage of people even planned their “debt-free” celebrations after paying all their dues.
Who to trust when the bills pile up?
Conducted by OnePoll and commissioned by TrueAccord, a digital debt collection company, the study found that 77% of respondents lost an average of nine hours of sleep per week due to financial hardship.
When going through a financial crisis, 63% turn to someone they trust, half to their parents, 48% to their best friend and 46% to their primary bank. Overall, 87% of people attribute their financial “gains” to people who gave them advice, while seven in 10 say they learned from the financial mistakes of others (71%).
“There are nearly 80 million Americans who have unpaid debts and most want to pay them off and get on with their lives,” TrueAccord founder Ohad Samet said in a statement. “But it’s extremely difficult, especially in a debt collection system that treats consumers poorly and is more interested in the process than in simplifying debt repayment.”
“What we’re seeing more and more are indebted consumers who want to pay off their balance but face challenges in communicating with collectors, financial literacy, and budgetary considerations that create barriers to being debt-free.”
Most people keep score
The average person doesn’t understand the importance of their credit score until age 28, but thinks it’s best to start building credit at age 25. More than four in five (84%) say maintaining a good credit score is important to them, with almost as many (81%) saying it’s even more crucial than their social life.
Respondents also shared how they feel when they see their credit card statements and when they are about to make a payment. Three in 10 feel confident and 24% feel fear when looking at their financials. In contrast, people feel satisfaction (36%) and happiness (22%) when they finally make that payment.
While 38% do not plan to take out a loan in 2022, many are planning to do so, including credit card loans (34%), personal loans (33%) and mortgages (30%).
“For those who can pay off their balances, there may still be a more lasting impact on their credit score that may be difficult to remedy and further hamper financial stability,” says Samet. “People will continue to borrow money when they need it, but what is important is that they are informed of the loan or credit terms and have a financial plan in place to get there. ensure they make smart spending and reimbursement decisions. Ultimately, getting into collections is often the result of trauma – job loss, health crisis, etc. – many of which are unexpected.