Poll: Americans with unsecured debt are primarily to blame for credit cards


A US News & World Report poll in late August 2021 shows that more than 53% of Americans who carry unsecured debt say it is mostly credit cards.

Credit card debt is considered unsecured debt, which means it’s not tied to an asset like a home or car. Respondents were asked what types of debt make up the bulk of their unsecured debt, and in addition to credit cards, they name:

About 52% of respondents say they have between $ 10,000 and just under $ 40,000 in unsecured debt.

What interest do you pay?

Almost 8% of respondents say they don’t know what their highest interest rate is, which is worrying. Among those who know their prices, here are the results:


  • Around 35% indicate an interest rate of 10% or less.
  • More than 20% has a rate between 11% and 15%.
  • More than 19% have a rate between 16% and 20%.
  • Almost 16% have a rate between 21% and 25%.
  • Nearly 7% have a rate between 26% and 30%.
  • Almost 4% have a rate greater than 30%.

Your interest rate depends on the type of debt you have and your credit rating. With debt comes interest expense. Some types of unsecured debt, such as credit cards and payday loans, charge compound interest.

This means that you are paying interest on a balance that includes the previous month’s interest. With compound interest, your debt can grow quickly. Once you get caught in this dangerous spiral, it is difficult to get out.

Why Americans Are Struggling to Get Out of Debt

Almost 42% of respondents say they have more unsecured debt than they did a year ago. When asked about the biggest challenges in paying off debt, around 20% said it was an unexpected expense.

  • Around 19% have problems paying bills on time.
  • More than 15% have problems budgeting payments.
  • More than 15% cite inconsistent income as the culprit.
  • About 13% say that rising interest charges are an important factor.
  • More than 7% have trouble keeping track of multiple accounts.

How to Pay Off Your Debt

The first step is to find out what is preventing you from dealing with your debt. And if you find that you have room for improvement in several areas, that’s fine too. Be honest about your situation and then you can focus on one or more of these solutions:

Almost one in five respondents stated that they did not pay bills on time. If the problem is that you don’t have the money when the bill is due, you need to contact your lender and explain your situation. Depending on the lender, it is possible to get into a compassionate use program while you catch up on bills.

If the issue is timing, see if you can change the invoice due date. Postpone it to a week when you have cash flow to cover the expenses.

But what if it’s all about forgetfulness? The simple solution is to automate your payments for as many invoices as possible. When you set up automatic payments with your bank or credit card, your lender will deduct your debt from your authorized bank account.

But make sure you have the money in your bank account to cover the amount. Once you’ve found a rhythm and paying your bills on time, you can start looking for solutions that will help you pay less interest on your debt.

When asked how to pay off debts, around a quarter of respondents choose a debt consolidation loan as the most attractive option. With this type of loan you will consolidate your debts and thus reduce your number of creditors. And hopefully you get a lower interest rate and lower monthly payment.

You need to do some online comparison purchases. Compare prices and make sure you are getting the best terms that you can qualify for.

It is important to note that it is not a good idea to consolidate medical debt. It can add interest expense to an already unwieldy debt. Consolidating medical debt also removes the consumer protection that applies to medical debt.

However, for other types of unsecured debt, a debt consolidation loan is a great option for those who do not have excellent credit ratings. However, if you have a large bankroll, consider using a prepaid credit card.

If you have an excellent credit rating, you should qualify for a credit transfer credit card. These cards are often offered with an introductory annual rate of 0% for a period of e.g. B. delivered 12 to 18 months.

This gives you the opportunity to withdraw (or at least reduce) the balance during the interest-free period. By going this route, you will find out what your monthly payment needs to be in order for you to have a zero balance before your regular APR comes on.

If their debts were paid off, nearly 23% of respondents say they would use the extra money to top up their emergency fund, which is an excellent choice. An emergency fund will help you weather a sudden financial crisis.

Even if you are in debt, try to put some money in your emergency fund every now and then. A little helps too.

If you feel that your debt is insurmountable, get help. No matter how bad your situation is, there is a solution. It may take a long time to fix, but starting today is the right step.

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