Most Americans have some credit debt. But this year, credit card debt has reached an all-time high. The latest figures show American’s owe $986 billion in credit card debt, according to the Federal Reserve Bank.
According to Lending Tree data, the state with the highest credit card debt is Connecticut, and the lowest is Kentucky. Nevada ranks 13th, with people holding an average debt of almost $8,000.
The top two reasons people are using their credit cards more are that they just want to get out and live a little after the pandemic lockdown, or they need to use their credit cards to make ends meet with inflation and rising costs of just about everything.
Brad Zucker with SMA Wealth Management said regardless of the reason, paying off a credit card debt that now averages 20% interest can turn a short term debt into a long term expense.
Zucker advised choosing a pay-off strategy. "Either what they call the avalanche method, that’s where you’re going to tackle the highest interest rate first. Or, the snowball method, where you’re going to tackle the smallest balance first."
Zucker also advised doing everything you can to reduce your expenses and whatever you’re able to reduce, put it into savings.
Interest rates are expected to continue to rise during the rest of this year.
"That being the case, if you do have multiple credit cards, you do want to consolidate credit cards into the lowest interest rate that’s available to you," he said. "And like I mentioned, interest rates continue to move up and probably will for the rest of this year."
