Required

The Long-Term Impact Of Credit Debt In Depth

Written by:
AmONE
Edited by:
Kristin Marino verified

long term credit card debtFor some people, too much of a good thing can be a bad thing. The good thing is credit, which leads to the bad thing: debt. The average credit card debt per household is $15,799 — that’s with the average total household debt being $54,000. Unfortunately, there’s more bad news. The average debt of a household will increase 1.48 percent over the holidays.

Thanks to clever marketing and intense promotion surrounding discounts and savings, it’s easier for the holiday consumer to rack up large amounts of debt. According to a CNN Money article, in 2012 consumers spent over 59.1 billion dollars during Black Friday. This increase in purchases is about $300 per person and it can easily multiply with interest for those who use credit. However, the impact of debt lasts much longer than your new holiday gadget.

With the introduction of mobile and smart phones, consumers have been able to find a deal without ever having to leave their home. CNN Money revealed that 24 percent of the purchases made in 2012 were from a mobile device. A growing number of retailers can count on making 40 percent of their annual sales over the holiday season.

Statistic Brain, a statistics research company, revealed that 14.7 percent of American families exceed 40 percent of their income. Additionally, the average household debt dropped in 2009. While that drop might sound good on the surface, this statistical change was actually a negative sign of debt burden. Much of the decline in household debt caused consumer debt to be written off instead of paid off. Due to the write offs, credit companies became more restrictive with their lending. This in turn forced people to change the way they spend their money.. The good news is that for the last two years, credit companies have been less restrictive with their lending, allowing more people to obtain credit. As a result, credit card debt has begun to inch its way back up.

Credit Card Debt Statistics

[Source: Federal Reserve, Join Economic Committee, Sallie Mae, TransUnion Date Verified: 7.24.2012]

While the job market slowly catches up with the economy, many people are relying on credit to make up for a decrease in income and to meet their daily needs. Although the credit card debt statistics show there has been a steady increase in credit card purchases, people are still cautious with how they go about making those purchases. Credit card debt has maintained an average of $15,000, below 2009’s high of $19,000 for an average U.S. household.

American Household Debt Graph

[Graph: NerdWallet]

Although the future of credit stability is uncertain, the best way to avoid the long term impact of debt is by knowing your spending limits and using cash as often as possible. Although those holiday deals look great, think twice before applying for any retail sales cards, racking up charges during Black Friday, and use common sense. Don’t spend more than you already have and plan ahead. Set your shopping budget, make a list, and stick to it.

Get matched to your perfect loan and level up your money game.
Find My Loan
Popular Posts

Related Content

What to Do About Debt Collectors and Collection Calls
Debt | May 4, 2022
There are rules in place about debt collectors and how they can contact you. Learn how to deal with calls and pay off or consolidate your debt.
The 20/10 Rule & How It Helps With Debt Management
Debt | March 31, 2022
The 20/10 rule says, 20% of your annual net income should be spent on consumer debt and no more than 10% of your monthly net income should be used to pay debt.
Should I Get a Balance Transfer Card?
Debt | May 31, 2022
A balance transfer credit card can help you pay off your debt faster if you use it right. Learn how to get the most from a balance transfer.
Getting Out of Debt: Secured vs. Unsecured Debt Consolidation Loans
Debt | June 13, 2012
The main difference between secured vs unsecured debt is Secured loans require collateral, unsecured loans do not. Both can help you manage and get out of debt.
The Best Debt Consolidation Personal Loans for 2025
Debt Consolidation | March 31, 2022
Debt consolidation loan helps lower your interest rate and monthly debt payment? Learn how a personal loan can help you take charge of your debt and pay it off.
Minimum Credit Card Payments: What You Need to Know and How to Get Ahead
Debt | December 18, 2024
Learn how minimum credit card payments work, their long-term impact, and strategies to pay off debt faster. See how debt consolidation can save you money.

Ready to up your money game?

See my loan options
Why AmONE is Trusted By Millions for Their Loan Needs

Anyone can put together a group of lenders in a marketplace to offer people loans. We go beyond that. We not only partner with some of the best lenders around (like Citi, Rocket Loans, SoFi and so many more), we also work with partners who can help people like you go beyond a one-time loan. We connect you with the money programs you need to help you get real financial solutions in place that allow you to tackle your debt and money problems so you can move forward. Getting out from under debt to financial freedom is daunting and we're ready to help you every step of the way.

AI is the hottest thing around right now, but we know from our decades of experience in the personal finance space that the last thing someone wants to do is talk to a robot when they need real answers. Solving money problems can be stressful and daunting, so don't settle for generic responses and information that offers little real financial insights. Speak to one of our many support specialists who all work from an AmONE office right here in the U.S. and get the answers you really need to make better financial decisions.

We work hard to find loan offers for even the most challenging financial situations. With our large lender marketplace, we know we give everyone the best shot at getting the loan, debt and credit help they're hoping to find. Even when someone's credit is clearly poor or they hold a large amount of debt, we still get our customers in front of lenders to give them the best shot at securing the funds they need. When the unexpected happens and customers are rejected for loans, we still work with them to find other financial solutions that put them on the path to financial recovery so they can keep moving forward toward their money goals.

Anyone can put together a group of lenders in a marketplace to offer people loans. We go beyond that. We not only partner with some of the best lenders around (like Citi, Rocket Loans, SoFi and so many more), we also work with partners who can help people like you go beyond a one-time loan. We connect you with the money programs you need to help you get real financial solutions in place that allow you to tackle your debt and money problems so you can move forward. Getting out from under debt to financial freedom is daunting and we're ready to help you every step of the way.

handicon
Matched with Lenders Who Fit Your Needs

Tell us your situation and we will match you instantly to financial solutions that are right for you.

shieldicon
Get Offers from Only Highly Rated Providers

We work with only the highest-rated partners that provide the best chance to get you the loan you need for your situation.

supporticon
Easy Access to Live Support Based in the U.S.

Get live support when you need it most, through email or phone, and have your questions answered fast.