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Tax Blog

Credit Card Debt Passes $1 Trillion

The Federal Reserve Bank of New York released its Household Debt and Credit Report last week. In that report, the credit card debt held by Americans crossed the $1 trillion threshold for the first time. Delinquency rates also rose for accounts 30 days past due rising to 7.2%. According to Cardrates. com[1], in 2023, the average household had $9,654 in credit card debt, up from $8,916 in 2022. With the Federal Reserve raising interest rates, credit cards now average a 24.72% interest rate.

Ready for some scary math? Assuming a $5,000 balance and paying $250 per month utilizing that 24.72% interest rate it would take 2 years and 3 months to payoff the balance. During that time, you would pay interest of $1,510.67 bringing that total to $6,510.67. And that is assuming you do nothing with the credit card during that time period.

There are many resources available online for taking control of your credit card debt and each method has its pros and cons so I will leave that up to you to decide which method is best for your situation.

For more information, please reach out to the Professionals at The Center for Financial, Legal, & Tax Planning Inc., at (618) 997-3436.



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