Consumers leaning more on credit cards to pay household bills, survey finds
LendingTree: Typical credit card debt is $7,321
(InvestigateTV) — According to the St. Louis Federal Reserve, credit card delinquencies are hovering around 3%.
Sara Rathner, a personal finance expert with NerdWallet, said this is the highest they’ve ever been since the great recession in 2008, but it is still a sign that people are relying more on credit cards.
“As costs continue to rise for all of these things that we buy every day and incomes don’t keep up, then Americans are unfortunately taking on credit card debt often to pay for these necessary expenses,” Rathner explained.
She said NerdWallet discovered in a recent survey that 37% of Americans have been charged a late fee, not just on credit cards, but also on utility bills and rent.
She said sometimes people miss payments simply because they’re busy, while other times it’s because they don’t have the money on hand and are waiting for their next paycheck.
Rathner added if you’re struggling to pay bills on time, your first step should be reaching out to your credit card company, utility provider, or landlord.
“Just explaining your situation. Maybe you’ve recently lost your job, or you’re facing expensive medical bills or other situations that’s making it hard to make ends meet,” Rathner shared. “You always want to start by letting them in on your situation because there might be things they can do to waive late fees, put you on a payment plan, things like that.”
She said people should also consider ways to lower their credit card interest rates, starting by calling their card issuers and asking for a reduction — it never hurts to ask.
They can also check if they qualify for a balance transfer credit card with zero percent interest for a limited time, giving them a chance to pay down a large debt without added interest.
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