As Halloween draws near, we caution you to beware; it’s not just ghosts, goblins, and monsters that can cause a fright this time of year. When it comes to financial matters, you may be surprised to hear that credit cards and their lasting impact are surprisingly scary.
Don’t believe us? Keep reading if you dare—because we have five scary stats about credit cards that are sure to make you scream.
1) The Amount of Personal Debt We Carry is Terrifying
Ready for your first chilling fact? According to Experian’s Credit Snapshot of the Nation, the average American carries a credit card balance of around $6,354. Now, this may not seem like a scary number at first, but consider this perspective. There are roughly 189 million Americans who currently have one or more active credit cards—the average cardholder has four.
This means that, collectively as a nation, our total credit card debt has officially risen above $1 trillion dollars! Talk about a terrifying number!
2) The Truth About How Little We Save is Frightening
Did you know that one in five U.S. adults has more credit card debt than they have savings?
Why is this fact scary? Because it reveals an unsettling financial reality that so many individuals face—not having an emergency fund in place. When you’re unable to establish a stable emergency fund you are more at risk for having to turn to a credit card when faced with an unexpected or emergency expense. Not only does this result in a higher credit card balance that inevitably puts you further in debt, but more importantly it keeps you from achieving your savings goals.
3) The Impact of Missing a Payment Is Haunting
One of the most impactful factors to your credit score is making monthly credit card payments on time. Which is why missing even one payment can seriously come back to haunt you.
If your payment is more than 30 days late, you could experience a swift drop in your credit score by nearly 100 points or more. To make matters worse, your lender can legally report your late payment to the three major credit reporting bureaus (Experian, Equifax, and TransUnion). That reported missed payment could stay on your credit report for seven years—making it harder and more expensive to borrow in the future!
4) The Effect of High Interest Rates Is Inescapable
One of the most chilling factors is the interest rates charged by credit card providers. According to data from the Federal Reserve, the average APR (annual percentage rate) on credit cards is around 14.52%. But keep in mind that that’s just the average. Depending on your lender and credit score, some individuals could see APRs that reach as high as 30%!
Here’s why these numbers are significant: credit card interest is applied to the statement balance you owe at the end of every month. If you’re unable to pay the amount owed in full each month, your account is going to accrue that interest, and you will see your overall balance rise. This is frightening because the higher your balance increases, the harder it is to pay off. Many fall into the trap of falling further into debt this way as it creates a repetitive cycle of carrying over an ever-increasing balance every month.
5) The Likelihood of Taking Debt To Your Grave Is High
The last—and probably scariest—stat of all: recent data has found that nearly 73% of Americans leave behind outstanding debt when they die. A majority of the unsecured debt left behind is credit card balances. In fact, the average unpaid credit card account is around $4,500.
After death, your creditors have the right to be paid first before your heirs. If there are any remaining assets left over after your debts are paid off, only then will they be transferred to your loved ones. Not exactly the legacy most hope to leave behind.
If you’re currently struggling with credit card debt and our scary stats have left you terrified, don’t panic! We have an effective solution to help calm your financial fears: using a personal loan from Credit Direct to consolidate your outstanding credit card debt is a smart way to take control of your finances. You’ll receive a fixed interest rate that’s likely to be significantly lower than what you’re currently paying each month. Combine that with a new affordable monthly payment, and you’ll start seeing noticeable strides in your debt repayment.
At Credit Direct, we make debt consolidation easy. With personal loans available up to $40,000, you can be sure to find the right solution for your financial needs. Applying online is easy and takes just minutes with no effect on your credit score. The only thing you should have to be scared of this Halloween is a tummy ache from eating too much candy!