Debt load of Americans who seek financial counseling exceeds $20,000 per household
American Consumer Credit Counseling says typical counseling client
holds almost six credit cards; Unsecured debt in these homes has skyrocketed
American households struggling with debt and seeking financial counseling or budgeting help are carrying more than $20,000 in unsecured credit card balances on average, according to a consumer analysis by American Consumer Credit Counseling, Inc (ACCC).
The staggering amount is more than double the debt of the average household carrying credit balances, and more than three times the average credit card debt of all households in the U.S.
The analysis of over 40,000 consumers also shows that the average person or household seeking budgeting assistance has 5.60 credit cards – the majority of which carry interest rates near or in excess of 20 percent.
“America has a love affair with credit card debt – especially when the economy is strong and unemployment is low,” said Steve Trumble, President and CEO of American Consumer Credit Counseling – which reaches tens of thousands of consumers every year. “The consumers we work with provide a very clear picture of where the tipping point is for households in debt. When someone is looking for financial counseling, it is safe to assume they are struggling with debt, and the numbers are pretty alarming.”
The average American household carries about $6,194 in revolving credit card debt, according to Experian. But among only those households that report carrying a balance each month, the total credit card debt rises to $9,333.
ACCC analyzed data and information from over 40,000 consumers who sought budget counseling since 2018. Among that group, the average household credit balances totaled $20,112. Average household income for those studied was $54,687 – suggesting the total debt-to-income ratio for many Americans needing budget help is in the danger zone.
Debt burden is a leading source of financial stress. In fact, consumers consistently cite money as a major concern and worry, with as many as seven in 10 Americans admitting they have cried over their finances.
Financial stress can stem from all sorts of challenges: not making ends meet, overwhelming debt, or trying to save for college, a home or retirement. Employment status or the sudden loss of a job can throw a household into crisis-level financial difficulty. However, ACCC’s analysis found that – at a time when U.S. unemployment continues to be low – job status, income or employment is not the leading driver of their clients’ challenges. Just 28 percent reported that reduced income was the source of their financial trouble.
According to a study by Northwestern Mutual, 87 percent of consumers say they are most happy and confident when their finances are in order. The study also found that 54 percent of consumers experience anxiety due to finances, 52 percent experience insecurity and 48 percent experience fear. Money is a dominant source of stress for most people surveyed (48 percent) – far outweighing personal relationships (25 percent) and work (18 percent).
About American Consumer Credit Counseling
American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management through credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling and financial education concerning debt solutions. To help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loan assistance, youth and money, homeownership, identity theft, senior living, and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free financial education resources, log on to ConsumerCredit.com or visit http://www.consumercredit.com/financial-education.aspx