This Shocking Statistic Shows Just How Much Americans Are Charging on Their Credit Cards

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The average credit card balance is $5,910 per borrower, according to Dave Ramsey. Here’s why that’s such an alarming figure. 

Using credit cards is very common, and with good reason. It’s possible to earn generous rewards using rewards cards. And credit cards can help you build credit. They can also help you fund purchases you can’t pay for all at once — although, they do have high interest rates, so this may not be the best approach unless you have a 0% APR card.

With so many people using cards, you may wonder what the average balance carried on them is. Finance expert Dave Ramsey recently shared this statistic, and it may surprise you.

Just how much are Americans charging on their credit cards?

According to the Ramsey Solutions blog, the average credit card debt balance per borrower in the fall of 2022 was $5,910 per person. As Ramsey pointed out, “That’s more than three times the average mortgage payment.”

Having a credit card balance that exceeds your monthly housing costs is obviously not ideal — especially if you are carrying that debt from month to month and are paying interest on it. Credit cards tend to charge high interest rates so if you owe thousands, you could end up taking many years to become debt-free and spending a small fortune in the process.

Say, for example, you owe $5,910, your card has a 17% APR, and you’re paying $143 per month. It would take you 63 months to become debt-free and you would pay total interest costs of $3,042.52, so you’d end up sending your creditor a whopping $8,952.52 over that time.

How can you pay down your credit card balance?

If you have a large balance on your credit card, you should seriously consider making a plan to repay what you owe so you can avoid enriching your creditors at the expense of your own future financial security. A big credit card balance can rob you of the chance to use your income for other things since you’ll be sending money to the credit card companies month-after-month.

One of the best ways to repay your credit card debt is to reduce the interest rate on it using a balance transfer credit card or a personal loan. If you can bring down your interest rate and make extra monthly payments, more of that money can go towards reducing the balance owed instead of just paying interest without actually lowering the amount of your principal.

If you transfer the balance of your high-interest cards to a balance transfer card with a 0% rate for a period of time (such as 12-16 months), you should try to pay enough each month to pay the balance in full by the time the promotional rate expires. If you use a personal loan to repay credit card debt, you will have a fixed timeline for repayment based on whatever the personal loan’s repayment term is.

If your credit card balance is as high as the average American’s, or even higher, then considering these other options could be very important to deal with your debt and ensure that the amount you owe doesn’t impact your ability to build a secure financial future.

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