Credit card debt plummeted during pandemic – but average amount exceeds $ 5,660

RALEIGH, NC (WNCN) – There is good news resulting from the pandemic – it has brought down credit cardholder debt as more people pay their cards.

However, the average cardholder still has over $ 5,000 in credit card debt.

Those who follow credit cards say about $ 106 billion in credit card debt has been paid off by consumers due to the influx of stimulus money during the pandemic, as well as the fact that many people did not go out as much last year, reducing their credit card use.

Even with these gains, many people still have a lot of credit card debt.

“The total amount of credit card debt today is $ 787 billion,” said Doug Milnes of MoneyGeek.

This works out to $ 5,668 in credit card debt for the average person, who typically carries that debt on four or five credit cards.

Here in North Carolina, an analysis from MoneyGeek indicated that cardholders have card debt of around $ 5,100, slightly below the national average.

When it comes to those high balances, payments over that amount can still hurt you due to the interest rates charged by the credit card companies.

“They’re really high and if you carry a balance it can create a vicious cycle where the interest rate increases your balance and it’s even harder to get out of it,” Milnes said.

“The ideal balance is the amount that will go into your monthly expenses,” he said. “You really have to be able to pay your credit card bill every month. “

MoneyGeek says you shouldn’t be using your credit card as a tool to buy things you can’t afford.

“If you have multiple credit cards, it’s important that you manage them all,” he said. “Out of all those balances, you want to be able to pay off those credit cards. “

If you’re trying to reduce your balance by paying more than the minimum payments, don’t keep using your credit cards to buy more stuff.

“Depending on your balances and your interest rates, you might not make a difference in your balances next month, especially if next month has the same level of spending,” Milnes said.

If you get to a place where you have a hard time paying for those cards, make a plan to cut other spending so you can get those card payments under control again.

Once you have that plan, stick to it. It’s like a diet. You might not see results immediately, but in the long run it will pay off.

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