Poll: Americans with unsecured debt are primarily to blame for credit cards

A US News & World Report poll in late August 2021 shows that among Americans carrying unsecured debt, more …

End of August 2021 opinion poll by US News & World Report shows that of Americans who carry unsecured debt, over 53% say it is mostly credit cards.

Credit card debts are taken into account unsecured debtwhich means it is not tied to an asset like a house or a car. Respondents were asked what types of debt make up the bulk of their unsecured debt, and in addition to credit cards, they name:

Personal Loans, at almost 21%.

– Medical debt, 12%.

Payday loan, more than 5%.

About 52% of respondents say they have between $ 10,000 and just under $ 40,000 in unsecured debt.

[Read: Best Balance Transfer Credit Cards.]

What interest do you pay?

Almost 8% of respondents say they don’t know what their highest interest rate is, which is worrying. Among those who know their prices, here are the results:

– Around 35% indicate an interest rate of 10% or less.

– More than 20% have a quota between 11% and 15%.

– More than 19% have a rate between 16% and 20%.

– Almost 16% have a rate between 21% and 25%.

– Almost 7% have a rate between 26% and 30%.

– Almost 4% have a rate over 30%.

Her interest rate depends on the type of debt you have and your credit rating. With debt comes interest expense. Some types of unsecured debt, such as credit cards and payday loans, charge compound interest.

This means that you are paying interest on a balance that includes the previous month’s interest. With compound interest, your debt can grow quickly. Once you get caught in this dangerous spiral, it is difficult to get out.

Why Americans Are Struggling to Get Out of Debt

Almost 42% of respondents say they have more unsecured debt than they did a year ago. When asked about the biggest challenges in paying off debt, around 20% said it was an unexpected expense.

Further findings:

– Around 19% have problems paying bills on time.

– More than 15% have problems budgeting payments.

– More than 15% cite inconsistent income as the culprit.

– About 13% say rising interest charges are an important factor.

– More than 7% have problems keeping track of multiple accounts.

How to Pay Off Your Debt

The first step is to find out what is preventing you from dealing with your debt. And if you find that you have room for improvement in several areas, that’s fine too. Be honest about your situation and then you can focus on one or more of these solutions:

– Automate your finances.

– Get a debt consolidation loan.

– Apply for a credit card for credit transfer.

– Build up an emergency fund.

– Get a loan counseling.

Automate your finances

Almost one in five respondents stated that they did not pay bills on time. If the problem is that you don’t have the money when the bill is due, you need to contact your lender and explain your situation. Depending on the lender it is possible to get into one Hardness program while you catch up on bills.

If the issue is timing, see if you can change the invoice due date. Postpone it to a week when you have cash flow to cover the expenses.

But what if it’s all about forgetfulness? The simple solution is to automate your payments for as many bills as possible. When you set up automatic payments with your bank or credit card, your lender will deduct your debt from your authorized bank account.

But make sure you have the money in your bank account to cover the amount. Once you have found a rhythm and paying your bills on time, you can start looking for solutions that will help you pay less interest on your debt.

[Read: Best Debt Consolidation Loans.]

Get a Debt Consolidation Loan

When asked how to pay off debts, around a quarter of respondents choose a debt consolidation loan as the most attractive option. With this type of loan you will consolidate your debts and thus reduce your number of creditors. And hopefully you get a lower interest rate and lower monthly payment.

You need to do some online comparison purchases. Compare prices and make sure you are getting the best terms that you can qualify for.

It is important to note that it is not a good idea to consolidate medical debt. It can add interest expense to an already unwieldy debt. Consolidating medical debt also removes the consumer protection that applies to medical debt.

However, for other types of unsecured debt, a debt consolidation loan is a great option for those who don’t have one excellent credit scores. However, if you have a large bankroll, consider using a prepaid credit card.

Apply for a prepaid credit card

If you have an excellent credit rating, you should qualify for a credit transfer credit card. These cards are often offered with an introductory annual rate of 0% for a period of e.g. B. delivered 12 to 18 months.

This gives you the opportunity to withdraw (or at least reduce) the balance during the interest-free period. By going this route, you will find out what your monthly payment needs to be in order for you to have a zero balance before your regular APR comes on.

[Read: Best Low-Interest Credit Cards.]

Build an emergency fund

If their debts were paid off, nearly 23% of respondents say they would use the extra money to top up their debt Emergency fundwhich is an excellent choice. An emergency fund will help you weather a sudden financial crisis.

Even if you are in debt, try to put some money in your emergency fund every now and then. A little helps too.

Get credit counseling

If you feel that your debt is insurmountable, get help. No matter how bad your situation is, there is a solution. It may take a long time to fix, but starting today is the right step.

You can contact National Foundation for Credit Advice Find a reputable credit counseling agency.

More from US news

What is a late credit card account?

Can I get a personal loan with bad credit?

What is a maxed-out credit card?

Poll: Americans with unsecured debt are primarily to blame for credit cards originally appeared on usnews.com

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