Latest news with #creditcardholders
Yahoo
2 days ago
- Business
- Yahoo
High earners have credit card debt, too. Good luck getting them to admit it.
Credit card debt is an embarrassment to many Americans. It is especially embarrassing, apparently, to people who earn a lot. Roughly two-fifths of consumers with credit card debt have lied about the amount of their debt, according to a recent survey from LendingTree, an online lending marketplace. Among those with card debt who earn more than $100,000 a year, the share who lie about it rises to half. Experts say a credit card balance isn't like other debt when it comes to guilt and shame. A homeowner with a 4% mortgage interest rate might brag about it to the neighbors. A young adult might bemoan a student loan with a five-figure balance. Compared to those debts, however, credit card debt can feel like an emblem of incautious spending, poor planning or bad budgeting. 'A lot of people see credit card debt as a sign of failure, and maybe a sign of weakness, or lack of discipline,' said Matt Schulz, chief consumer finance analyst at LendingTree. LendingTree reports that the nation's collective credit card balance is $1.2 trillion as of early 2025. Roughly 46% of cardholders carried a balance for at least one month in the past year. For cardholders with debt, the average amount is $7,321. The average credit card interest rate is a whopping 21.4%. LendingTree surveyed 2,000 consumers in March and asked about their credit card habits. Among the findings: 39% of those with card debt said they had lied about it, most often to a partner, parent or sibling. Six-figure earners with card debt were more likely to lie about it than those earning less than $30,000, by a margin of 50% to 32%. 28% of consumers with card debt said they hadn't discussed it with anyone. Women were more likely than men to keep mum. Credit card debt might seem like a problem confined to lower-income Americans. However, LendingTree found that half of the six-figure earners have card debt, compared with 39% of those earning less than $30,000. 'People don't expect people who earn a lot of money to have a lot of credit card debt,' Schulz said. 'And the truth is that having a lot of money doesn't mean you're good at managing it.' If you are saddled with card debt, here are some expert tips for working your way out of it. If you're determined to pay down your card balance, get aggressive. The minimum payment, calculated by the card company, typically covers only the interest due and 1% of the balance, said Ted Rossman, senior industry analyst at Bankrate. To make a real dent, experts say, stop making new charges on the card. Then, bump up your payments. Consider a monthly sum equal to 5% of your gross income. Alternately, make double the minimum payment in the first month. Then, pay the same dollar amount in the following months, as the balance falls. If you have more than one credit card, experts say you should pick one and get serious about paying it off. Start with the card with the highest interest rate or the smallest balance. If you pick the card with the smallest balance, you can pay it off quickly and score a psychological victory. If you choose the card with the highest interest, you will pay less interest over time. While the average credit card interest rate now tops 20%, it's still possible to sign up for a card that accrues no interest at all for a period of 15, 18 or 21 months. Experts say that the zero-APR card can be a powerful tool for paying down debt because you pay no interest over the months of the promotion. Be careful, though: Once the promotion ends, the card company will charge interest on any remaining balance. Another way to pay off a card balance more quickly is to persuade the card company to lower your interest rate. Call the provider and ask if they would consider a rate reduction. If that doesn't work, consider contacting a nonprofit such as the Consumer Credit Counseling Service. Credit counselors can negotiate lower interest rates on your behalf. This article originally appeared on USA TODAY: Credit card debt shame is real, especially for those making over $100K
CBS News
27-05-2025
- Business
- CBS News
What to do if you max out your credit card (and can't pay)
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. Maxing out your credit card can cause big issues with your finances, especially if you can't afford to pay what's owed. Getty Images Americans are leaning on credit cards more than ever as inflation (while cooling) continues to drive up the prices of necessities and strain household budgets. According to recent data from the Federal Reserve, the total amount of credit card debt now exceeds $1.18 trillion nationwide, and the number of cardholders with maxed-out credit cards has also been climbing. Those types of issues are clear indicators of not just how reliant people have become on their credit cards, but also how difficult it's become to manage credit card debt in today's tough economic landscape. But maxing out your credit card is a dangerous path to take, especially if you're relying on this type of short-term borrowing to fill in the gaps between your expenses and your income. And, if you hit your credit limit and then realize you can't afford the next payment, you could find yourself in even bigger financial trouble. All it takes is missing a payment (or two) for the late fees to stack up and the penalty APR to kick in, making your debt even more expensive. Fortunately, there are strategies you can use in these situations to help regain control of your finances. So, what exactly can you do if you've maxed out your card and can't pay it off? That's what we'll examine below. Get more help with your credit card debt now. What to do if you max out your credit card and can't pay If your credit card balance has hit or exceeded your credit limit and you aren't sure what to do, here are the steps you may want to take: Don't ignore your bill; communicate with your credit card issuer instead It might feel uncomfortable, but one of the first things you should do if you're maxed out and can't pay is contact your credit card issuer. Explain your situation honestly and ask if they offer any hardship programs. Many lenders have internal programs that can temporarily reduce your interest rate, waive late fees or adjust your minimum payment. Access to these programs is not guaranteed, but in many cases, simply asking can lead to some relief, especially if you've been a responsible borrower up until now. Explore your debt relief options and take action today. Stop using the card immediately Once you've hit your credit limit, using your card again will likely trigger over-limit fees (if your issuer allows it) or declined purchases. Continuing to spend can also make your financial hole deeper, an issue that you want to avoid if at all possible. So, if you're relying on that card for daily expenses, stop using it, even if your card issuer allows you to continue making charges. If you can't pay cash for what you need, it may help to look for alternative resources, like assistance programs, freelance work or side gigs, to float you until things stabilize. Prioritize your payments and cut unnecessary expenses Even if you can't pay the full balance, making something, even a partial payment, can help you avoid steeper penalties. You should also take a close look at your income and spending and prioritize your most urgent financial obligations. Cut out or reduce non-essential expenses like subscriptions, dining out or shopping, and redirect that money toward your credit card bill whenever possible. Consider debt relief strategies if the debt is unmanageable If you've maxed out your card and genuinely don't see a way to catch up on payments, it may be time to consider a more structured debt relief strategy. Here are a few to look into: The bottom line Financial setbacks happen, but they don't have to define your future. While maxing out your credit card when you're unable to pay it off may be stressful, the good news is that there are options. And, while finding the right strategy is important, how quickly you take action is equally crucial. Whether that means negotiating with your card issuer, cutting expenses to free up cash, or enrolling in a debt relief program, the sooner you act, the more control you'll have over the outcome.
