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Americans $1 trillion in credit card debt, local credit experts seeing common mistakes

WalletHub, a personal finance website, reports at the end of June the average American household had more than $10,000 in credit card debt.
Americans $1 trillion in credit card debt, local credit experts seeing common mistakes
Posted at 5:00 AM, Sep 19, 2023

COLORADO SPRINGS — Credit card spending is up across the country right now, with consumers racking up a record $1 trillion in credit card debt. Federal Reserve researchers say it’s the most common debt for American households right now.

Financial experts say planning for and managing credit card debt is so important for families in our communities right now.

Local credit repair experts tell me many people coming to them with bad financial situations wish they would’ve found professional help sooner, but say they felt embarrassed or even ashamed of their poorly managed credit cards.

One News5 viewer says she used to feel that way too, but had the courage to get help and now is able to own a home because of the work she’s put in.

”You feel so embarrassed and so irresponsible and you ruminate there and stay there, but that’s not the place you should stay,” said Roselle Campbell. “It’s ok to ask for help.”

She says it was not an easy decision to sit down with us to talk about the pain of financial challenges she’s experienced, but wants to motivate others not to settle for the hopelessness of overwhelming credit card debt.

”I know a lot of people are not even open to having that conversation because there’s such a stigma to it. But in my situation I got over it,” said Campbell.

She says getting professional help wasn’t the only necessary change. She had to be honest and get serious about her spending habits.

”I had to look at what was coming in and what was going out finances wise, money wise, and I had to be really disciplined that my money goes to the basic needs of me and my children,” said Campbell.

Faith Boone works at Credit Yetti in Colorado Springs, helping people manage their finances and credit. When it comes to credit cards she sees a lot of common mistakes that add up over time.

”There’s a lot of instances where they’re like I’ll put it on the credit card it’s $5. Then they do that everyday for two months and then you’re like ok so now you’ve got a couple hundred extra dollars added on there that you couldn’t afford in the first place,” warned Boone. “Again, you have to look at your finances. Budgeting is so important. Creating an emergency savings is so important. Both of those things are going to benefit your credit.”

Allison Hill of Turn The Page Financial says even if you aren’t missing payments yet, high credit card balances themselves should be addressed.

”People don’t understand that when you go over 50% of your credit limit you are telling the banks and the credit bureaus that you are dependent on your credit cards. So, what happens is they drop your score,” said Hill.

She says sometimes when people are trying to take control of their spending, they’ll cancel credit cards, but that can be costly too.

”If they don’t want them we tell them to freeze them, shred them, but do not close it because that’s going to hurt your credit score,” said Hill.

With a better managed financial situation, Campbell says now she’s experiencing a breakthrough when she hands over cash instead of plastic.

”That gives me a better sense of accomplishment that I’m like, oh, this is good. I earned this,” said Campbell.

WalletHub, a personal finance website, reports at the end of June the average American household had more than $10,000 in credit card debt.

If you do seek professional help make sure you do your homework to ask around and verify you’re working with a reputable company,but you may want to start by calling your credit card company yourself to see if you can negotiate payment terms. In some cases you might qualify for a hardship program, especially if you’ve been a longtime customer.

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