The holidays are a perilous time for the nation’s credit card holders. This year, the stakes feel higher than ever.
America faces a crushing credit card burden. The nation’s collective card balance stands at a record $1.08 trillion, as of the end of September. The average interest rate has hit 21%, the highest figure recorded by the Federal Reserve in nearly three decades of tracking.
And now, the holidays are here. Thanksgiving ushers in the season of giving – and spending. The average holiday shopper expects to spend $1,652 this year, Deloitte reports, a bigger splurge than in any of the last three years.
Much of the tab will go on cards. In an October survey of 1,036 consumers by CardRates.com, 38% of respondents said they plan to carry holiday credit card debt into the new year.
Other Americans are determined to cut back.
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Angela Davis, 31, of Detroit is working with credit counselors to pay off $19,000 in card debt. This holiday season, she plans to keep her remaining cards under wraps. She hopes her loved ones will understand.
“I don’t know what their plans are,” she joked, “but I’ve already made it clear that I’m not spending no money.”
Her prudence comes even as more Americans fall behind on credit card payments, with the delinquency rate at nearly 3%, its highest point in more than a decade.
Credit counseling services are seeing a steady uptick in new clients, especially Gen Zers and millennials. At the credit…
