Record $ 83 billion in credit card debt decline in 2020 and cities with the biggest repayments – WalletHub Reports
While 2020 was a year to be forgotten in many ways, Americans have excelled at paying off credit card debt, getting rid of a record $ 82.9 billion debt, according to the latest website. personal finance WalletHub. Credit Card Debt Study, released today. This is a major achievement, given that consumers have added an average of $ 54.2 billion in credit card debt per year over the past 10 years.
|Cities with the biggest debt repayment||The most indebted cities To augment|
|Oxnard, California||Burlington, Vermont|
|City of West Valley, UT||Lewiston, ME|
|Augusta, Georgia||Fort Smith, AR|
|Pearl City, HI||Pembroke Pines, Florida|
|Shreveport, LA||Norfolk, Virginia|
|Warwick, RI||Long beach, california|
|Gulfport, MS||Rutland, Vermont|
|Garden Grove, California||Grand Rapids, Michigan|
|Nampa, ID||Jackson, MS|
|Laredo, Texas||Manchester, New Hampshire|
Key Statistics From Credit Card Debt Study
- Consumers paid off nearly $ 83 billion in credit card debt in 2020 – a record high.
- The average household credit card balance was $ 8,089 at the end of 2020.
- Credit card debt rose $ 36.7 billion in the fourth quarter of 2020 – the smallest increase in 10 years.
- Credit card debit rates are down 24.3% from Q3 2020.
- The best balance transfer credit cards currently offer 0% APR for the first 12-20 months with no annual fee and balance transfer fees as low as 3%.
Key Findings from the Credit Card Debt Survey
- Few are planning a post-pandemic shopping spree. More than one in 10 people plan to spend crazy money when the COVID-19 pandemic is over.
- COVID is a debt brake. Almost 35% of Americans say COVID-19 has made serious credit card debt more difficult.
- Men feel the stress of debt less. Women are 37% more likely than men to feel stressed about credit card debt.
- Most agree that health care is solvent. 60% of Americans say healthcare costs are worth taking on credit card debt.
- Fight against high rates. 66% of people will try to lower the interest rate on their credit card debt in 2021
Q&A with WalletHub Analyst Jill Gonzalez
What do the latest credit card debt statistics tell us about the health of U.S. consumers?
“The latest credit card debt statistics tell us that American consumers are actually in some ways better financial health as a result of the coronavirus pandemic. We paid off a record $ 82.9 billion in credit card debt in 2020 – this is the second time in the past 35 years that we’ve even ended the year with less credit card debt. that at the beginning, ”said Jill Gonzalez, WalletHub analyst. “Paying off so much credit card debt indicates that consumers have made the most of the pandemic, using stimulus money and COVID restrictions to make their finances more sustainable. “
What will the level of credit card debt look like in 2021?
“WalletHub predicts consumers will add approximately $ 50 billion in credit card debt during 2021. A short-term spending explosion is inevitable as pandemic restrictions are lifted,” said Jill Gonzalez, WalletHub analyst. “The question is, in which direction the pendulum swings in 2022 and beyond. I hope consumers internalize the lessons learned during the pandemic and show a new frugality. “
What advice would you give to people trying to get rid of their credit card debt?
“People who are trying to get rid of credit card debt need to come up with an aggressive plan that will get them off their debt as soon as possible. Finding a way to maximize monthly debt payments is essential, which may mean cutting some expenses out of your budget. Credit card interest rates tend to be quite expensive, so time is really money when working to pay off credit card debt, ”said Jill Gonzalez, WalletHub analyst. “A lot of people think that getting rid of credit card debt is about cutting expenses, but it’s also important to look at the income side of things. Earning a higher income would give you more money to pay off your debts without changing your spending habits.