56 million Americans have been in credit card debt for at least a year
56 million Americans have been in credit card debt for at least a year, per CNBC.
In fact, as of November, 49% of credit cardholders are maintaining a balance from one month to the next, as per a recent Bankrate survey. This marks an increase from 31% in 2021 and 47% in July of last year.
Moreover, a significant 58% — or 56 million — credit card users have been stuck in debt for at least a year.
Experts attribute this trend to the surge in prices, which has intensified financial challenges for many households, leading more consumers to resort to their credit cards to cover day-to-day expenses. According to the latest government data, the inflation rate in America rose by 3.4% over the past year, driven by increased housing and energy costs.
"Inflation is making an existing trend worse," noted Bankrate senior industry analyst Ted Rossman, speaking with CBS MoneyWatch. "We've been seeing this for a while, with more people carrying more debt for longer periods of time. It's moving in the wrong direction."
As U.S. credit card debt crossed the $1 trillion mark last year, more consumers are feeling the financial strain.
While there have been reports of Americans indulging in significant spending over the summer on activities like travel, concerts, and dining out, they aren't necessarily accumulating debt due to impulsive purchases.
According to Bankrate, around 43% of those in debt are carrying a balance because of unexpected or emergency expenses, such as medical bills, car repairs, or home repairs. This aligns with a broader trend of the savings rate decreasing and more individuals living paycheck to paycheck.
Another survey by Forbes Advisor reveals that over 4 in 10 respondents have no leftover funds from their paychecks after covering expenses, and a staggering 77% report insufficient emergency savings to cover one month's expenses.
Many Americans find themselves burdened by emergency costs that drive them into debt because they lack sufficient savings. However, there are steps you can take to prevent this from happening.