The 5 Leading Causes Of Credit Card Debt

What Causes Credit Debt?

Americans have amassed more than $1 trillion in outstanding credit card debt – a record high, according to the Federal Reserve.

In its annual State of Credit study, Experian reports the average American credit card debt is a staggering $6,354.

*** SPECIAL NOTE *** – If your credit cards, personal loans, or medical debts have become unmanageable and you owe over $20,000… then go here for debt relief. We can help!

What leads to such a high amount of debt?

Here Are 5 Leading Causes Of Credit Card Debt

1- Overspending

As the economy has steadily improved since the Great Recession of 2008, consumers are more comfortable spending.

Many turn to credit cards for things like vacations, shopping with store credit cards, and daily living expenses, feeling confident that they’ll be able to repay the balance.

2 – Lack of an emergency fund 

Unexpected expenses, like a home or car repair, can break the bank.

A pay cut, job loss or temporary disability can also lead to an income loss, which would be easier to survive with a financial safety net.

However, without an emergency fund in place, many people have no choice but to turn to a credit card to cover these expenses.

3 – Medical expenses

The cost of medical care has increased over the years, with health insurance companies requiring patients to cover more expenses out of their pockets.

For some, credit cards are the only way to fund expensive, but necessary medical procedures.

4 – Divorce 

The average cost of divorce can be as high as $20,000 in some states, and many spouses must use a credit card to fund their split.

On top of this, the financial strain that comes from losing an income can put a family or individual in a position where relying on a credit card is necessary.

5 – Making only the minimum payment 

When interest is factored in, the minimum payment only lowers the outstanding credit card balance by a small amount each month.

Continuing to make purchases while only paying the minimum worsens the problem and creates the perfect storm for credit card debt.

Adopting good financial habits, like budgeting and saving, not only helps you avoid more credit card debt, but also gives you the ability to pay off your current outstanding debt for good.

At Americor, we understand the unique financial challenges people are facing today.

As America’s trusted source for debt relief solutions, we aim to empower you with financial knowledge that can lead to informed decisions, whether it’s about savings, investments, or managing debt.

If your debt has become unmanageable and you have difficulty making your debt payments each month, then you should consider a FREE consultation call with one of our certified Debt Consultants, who can provide personalized debt relief advice tailored to your specific needs.

By taking proactive steps today, you can put an end to your financial stress and work towards a brighter financial future. 

Remember, there is always hope for debt relief, and our team of experienced professionals are ready to guide you on your journey to regaining control of your finances.

For more information on Americor’s debt relief services, contact us today to see how we can help you eliminate your debts, and get on the fast-track to becoming completely debt-free!