Survey: 35% of U. S. adults with credit card debt said they do not think they will ever get out of debt.
With credit card debt hitting new records, some analysts are beginning to worry about the ability of many Americans to pay off rising debt levels.
And a new study calculates that up to 31 million Americans with credit card debt believe they will never be able to pay if off and will die with debt.
More: How do you pay off all that credit card debt?
More: Which generation has the most debt and the worst credit scores?
The Federal Reserve reported earlier this week that Americans’ outstanding credit card debt hit a new record in November as revolving credit, which is mostly credit card debt, jumped 13% to $1.02 trillion.
The rise in credit use is evidence of a more confident U. S. consumer but it could also be an early warning sign of potential trouble on the horizon, analysts say.
“While the monthly jump in credit financing can be interpreted as reflecting confidence of the U. S. consumer and perhaps is a positive sign for continued economic activity, others may see the spike in credit as a sign of consumption hubris,” Wells Fargo chief economist John Silvia said in a statement.
In a new survey conducted by YouGov for CreditCards.com, 35% of U. S. adults with credit card debt, or about 31 million, said they do not think they will ever get out of debt. Another 33% of Americans with credit card debt don’t know when they will be debt free.
“With credit card debt currently at record levels, it’s frightening that so many Americans do not have a plan to get out of the red,” said CreditCards.com senior industry analyst Matt Schulz. “Simply put, there’s only so much credit card debt Americans can absorb without it causing real problems.”
Schulz doesn’t think we are in a credit card debt crisis now since delinquencies are still low by historic standards, but they are rising which could signal future problems.
So what steps can you take to cut down and eventually eliminate your credit card debt?
Start with creating a budget and getting a grasp on your current financial state by seeing how much money is coming in and going out.
“It starts with looking at your budget, identifying where you can cut back spending and then putting a plan in place to attack high-interest loans,” Schulz said.
Ten weeks to cutting your bills down to size:
WEEK 1: How to start taming your budget-busting bills
WEEK 2: Five steps to cutting your expensive cable TV bill
WEEK 3: Shocking electric bill? Free changes can help you cut costs, save money
WEEK 4: How a few small investments can lower your water bill
WEEK 5: Take a bite out of your food bill: How to save money on groceries
WEEK 6: 5 ways to cut the cost of your commute
WEEK 7: How to throttle down on car costs and save thousands
WEEK 8: How to lower your housing costs, whether you rent or own
WEEK 9: How to save money on entertainment and still have fun
WEEK 10: Internet bill too high? Here’s how to save
