Growing trends of personal debts of average American is a concern for most people these days. Knowing credit card debt facts can help them manage their financial affairs better.
Personal debt of average American is growing at a staggering rate and with it is also growing the collection of credit card fees and finance charges. Official statistics indicate that an amount of $85 billion was collected in terms of fees and $110 billion in terms of finance charges in the year 2011 alone.
Use of Credit Cards
Some of the interesting credit card debt facts are as follows.
National debt of United States stands at 10 Trillion in comparison to 8, 4, 3, and 2 trillion of U.K, Germany, France, and Italy respectively. A substantial portion of such debt relates to credit cards.Consumers in United States spend around $51 billion on their credit and debit cards on fast food alone.One out of every ten consumers has over ten credit cards that sum up to 304 tons of plastic.Over 51% people have two or more credit cards in United States. It counts up to 305 million plastic cards that could span over 16 thousand miles.
The Debt Abyss
Other credit card debt facts that calls for general attention is that they have led the average consumer into a debt abyss of considerable depth and the repercussion on financial lives of the consumers is massive. A charge of $1,000 will take around 22 years to pay back and together with interest the amount repayable will be a staggering $3,300 if only the 2% minimum payments are made.
Credit Cards Past and Present
First credit cards those appeared in the market back in 1900 were only merchant specific and used in hotels and restaurants mainly. However, the credit card in the modern sense of the terminology came into existence in the year 1950 when Ralph Schneider and Frank X. McNamara started one for the Diners club. Interest rate on the card expenses were 7% and finance charge were $3 per card holder per annum. Chase and Bank of America came up with VISA credit cards in 1958 and the cards became extremely popular with the magnetic strips added during the 1970s.
Other Interesting Facts
Some other interesting credit card debt facts are as follows.
Visa cardholders account for transactions over $1 trillion per annum in United States alone.Complete closure of credit card account will have negative effect on the credit report and credit score of the consumer concerned. The reason for this is that the length of the credit history accounts for about 15% of the FICO scores as well as the Vantage scores.As most of the lenders and financiers depend on the FICO scores and credit report of the prospective borrower for approval of loans and finances, it is important to manage the credit card debt judiciously since it has got major impact on credit scores of consumers.
Today, the average household credit card debt in United States is around $8,400.