The Average Credit Debt For Americans

The average credit debt for each American has risen from around $10,000 for 2009 to well over $11,000 for this year. The average credit debt per household’s  is around $18,000 to $21,000 and doesn’t include mortgages. It is 12% higher for this year compared to last year. Over one quarter of the population in the U.S. is ranked above the national average credit debt. Today, over 43% of Americans spend over 130% of what they actually make. This means that more people are relying on credit to get what they need or want. Today, it is very simple to obtain credit cards and loans. Lenders know that if they lend to you, you will have to pay that back plus interest. They extend credit to just about everyone regardless of history and credit scores. This makes it too tempting to resist by most of us that have no willpower when it comes to spending. These people now have access to an instant abundance of spending power that they’ve never had before contributing to the average yearly credit card debt of over $8,000. The lower interest rates that are being offered and enticing credit card advertisements are leading our nation into spending habits that are spiraling out of control.

Average Credit Debt-Understanding The Basicscredit_report

Here is a pretty good guideline to follow if you would like to keep your households in line with what it should look like. Having a median household net income of around $46,000 yearly, you should only be paying about 50% of what you make on your debt. When making more, you can increase this amount by 10%-15%. This will leave you with enough to pay for other costs. Other expenses like food, transportation costs, utilities and expenses need to be factored into what you pay out also. Just remember that the more outstanding debt that you have, your credit score will be lower. Your outstanding debt makes up 30% of this score and your payment history makes up another 35%. The average credit score is around 690. The highest score available is 850 but it is rather difficult to maintain that type of score unless you make millions. The majority of us have less than perfect credit history, thus causing lower scores for some areas. This information makes you wander what happens to the percentage that is spending more than they make, doesn’t it? Well, this percentage is what leads to bankruptcies and foreclosures. In the past decade, as the average credit debt per American household rose,  the  amount of bankruptcies has doubled.

There is a way of reducing the average credit debt. If we all take responsibility for our own spending habits, we could make a difference in not only our own lives but also others around us as well. We can set good examples by paying our bills on time and by being responsible when it comes to how we use our credit. Who knows? Maybe we can set good examples for our country as well.

Author: Denette Wilford