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Credit card debt: 22% of Americans would rather let someone see their text messages than their credit history

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With rapidly rising interest rates and skyrocketing prices due to inflation, accumulating credit card debt is one of Americans’ biggest regrets. A new survey reveals that one in five people would rather let someone read their text messages than show them their credit history.

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The Upgraded Points survey reveals that 35% of respondents said they immediately regretted a credit card purchase. Additionally, 24% say they would rather go to the dentist than share their credit history with their partner.

Impulse purchases, which provide instant gratification, are also big regrets, with 36% of respondents saying they bought something with their credit card that they couldn’t afford but didn’t want to wait.

According to Creditcards.com, the average credit card interest rate is 17.46% as of July 20, and with the Federal Reserve set to raise rates again on July 27, this will likely continue to rise and “would cause average credit card rates. to quickly reach historical records.

“Now that the Fed is raising rates at its fastest pace in decades, credit card issuers are quickly adapting with their own matching rate increases. As a result, consumers are seeing card offers change at a rapid pace. dizzying, with several credit cards now advertising higher rates than they have advertised in years,” according to Creditcards.com.

In turn, “such an aggressive approach could help curb price growth, but is unlikely to help borrowers who are already in debt. With further rate hikes underway, borrowers who are already struggling with rates much higher than just a few months ago will have little time to pay off their current balances before their APRs rise again,” added Creditcards.com.

Along with rising rates, there is also an increase in debt. According to the Federal Reserve Bank of New York, credit card balances are $71 billion higher than in the first quarter of 2021 and represent a significant year-over-year increase.

According to the Senior Content Contributor of the Upgraded Points website and Founder and CEO of AuPACS, Stephen Au said that setting up automatic payment on your credit cards and forgetting about it is the best solution. “It’s automated and will help you maintain a perfect payment history for your credit score.”

Ted Rossman, senior industry analyst at CreditCards.com, told GOBankingRates that many people are afraid to look at their credit card statements because they can be overwhelming.

“TransUnion says the average American has a credit card balance of $5,010. Credit cardholders carry month-to-month balances on 40% of accounts, according to the American Bankers Association. The average credit card rate is 17.25%, which is approaching an all-time high,” Rossman said.

He added that credit card debt is easy to get in and hard to get out of, with half of people having credit card debt for at least a year and about a third having it for at least two years.

“If you only make minimum payments towards the average balance at the average interest rate, you will be in debt for more than 15 years and will owe about $6,000 in interest. It’s an unpleasant reality, but there are some things you can do to help,” he said.

Rossman says his best advice is to sign up for a 0% balance transfer card, which can pause the interest clock for up to 21 months.

“Other good strategies might include using a low-rate personal loan as a form of debt consolidation or engaging with a reputable non-profit credit counseling agency like Money Management International,” he said. -he declares.

Additionally, personal loan rates go down to around 6% over five years if you have good credit, and debt management plans offered by reputable credit counselors often have similar terms and are more widely available. , did he declare.

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“The fundamentals matter too. Boost your debt repayment strategy by looking for ways to increase your income and/or reduce your expenses. Ideas could include a side hustle, selling things you don’t need, or canceling infrequently used subscription services and going out to restaurants less frequently,” he added.

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About the Author

Yael Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She has also worked as a VP/Senior Content Writer for major New York-based financial firms, including New York Life and MSCI. Yael is now independent and most recently co-authored the book “Blockchain for Medical Research: Accelerating Trust in Healthcare”, with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in journalism from New York University and one in Russian studies from Toulouse-Jean Jaurès University, France.