Poll: 56% of balance-carrying cardholders have had debt for at least a year

But half of those indebted card users aren?t losing sleep about it

Barri Segal
Staff Reporter
Covering credit scores, personal finance and breaking news

Poll: 56% of balance-carrying cardholders have been in debt for at least a year

If you’ve had credit card debt for more than a year, you’ve got a lot of company.

According to a new poll from CreditCards.com, 56 percent of credit card holders who are carrying balances have been doing so for more than a year.

However, 50 percent of those indebted card users say they aren’t particularly stressed out about it.

But they probably should be, because the average credit card APR is nearing 18 percent, according to the CreditCards.Com Weekly Credit Card Rate Report.

People view credit card debt as a fact of life

Experts agree that people have come to view credit card debt as a way of life, and that they’re not as concerned with it as they should be.

“Many consumers don't look carefully at their bills and the interest rate they are paying ... it almost seems as though they cannot relate the numbers on the bills to actual money,” said Mary Gresham, an Atlanta-based psychologist.

Most people today are just moving money to credit card companies via banking apps – and computer-based movement of numbers is quite forgettable, she added.

In addition, many consumers are so used to handing over a plastic card to pay for things that they don't cognitively and emotionally connect that experience with spending real money.

“Electronic money does not register in the brain the way that real dollars do, and people will pay more for an item when using credit cards than when using cash,” Gresham said. 

“There is no loss or pain associated with this until a person reaches a credit card limit and can no longer use it. 

Some people have deep-seated, unconscious behaviors around spending beyond their means and taking on debt, said Thomas Faupl, a San Francisco-based marriage and family therapist who specializes in financial therapy and coaching.

And many lack the basic financial literacy skills to manage their money or even know what steps they should take to get out of debt.

“People can go into denial when they are feeling overwhelmed with or ashamed of the debt they are facing,” Faupl added.

See related: Creating a budget can help you cope with financial stress

Credit card debt poll: key findings

Here are some other major findings from our credit card debt poll:

  • Many people have been in debt more than a year: 37 percent of credit card debtors have been in debt for at least two years, 23 percent for at least three years and 14 percent for at least five years. And none of those groups include the 7 percent who can’t remember how long they’ve been in debt, which could mean it’s even longer.
  • 1 in 3 cardholders are carrying debt on more than one card: 59 percent of credit card holders are currently carrying a balance on at least one card and 31 percent are are carrying debt on more than one card.
  • Millennials are most likely to carry debt: 65 percent of those between the ages of 23 to 38 are most likely to be carrying balances, mainly for day-to-day expenses.
  • Lower income equals more debt: 66 percent of cardholders with annual household incomes below $30,000 are carrying card debt vs. 53 percent with annual incomes of $80,000-plus.
  • Higher income equals longer-term debt: 17 percent of respondents with annual incomes of $80,000 and higher have been carrying a balance for at least five years, compared with 7 percent of those who make less than $30,000.
  • Most say debt is related to necessary spending: 63 percent reported their credit card debt is due to necessary spending and 27 percent said it’s from discretionary items, such as retail purchases or vacations.

The survey of 2,504 U.S. adults was conducted online between Jan. 23-25, 2019. See survey methodology

 

Millennials are the most likely debtors

Debra L. Kaplan is an Arizona-based psychotherapist who works with couples on money issues and explores the narrative behind their spending or “debting” habits that they bring with them from early life patterns.

Every generation has a different relationship with money, some of which is informed by family and some of which is informed by peers, according to Kaplan. 

Many millennials have grown up in an age of financial expansion and have not experienced recession or economic distress, which might account for their carrying debt, Kaplan said.  

“And, if their families are not handling money well, they are not having a healthy model for saving, open communication about money or boundaries around spending,” she said.

Why someone might not stress over debt

Some people come from higher socioeconomic backgrounds and are not caught in a chronic fight-or-flight stress response around paying their bills and managing debt, Faupl said.

If you are making a good salary, you’re part of a high-earning couple or you have other financial assets, you know on some level that you can eventually pay off your credit card debt.

And if you grew up in an upper-middle class environment, you may never have experienced your parents having real struggles with debt and household finances. So you might not associate debt with stress.

“And that’s very different from someone who has limited cash flow and is struggling with the daily stress of trying to make ends meet and manage their debt obligations,” Faupl said.

"People can go into denial when they are feeling overwhelmed with or ashamed of the debt they are facing."

Long-term debt is rampant among highest-income households

According to the poll, long-term debt is a bigger problem among the highest-income households. 

Long-term, unsecured debt among high-income households typically indicates fundamental problems a person or couple has with money management – and that they are seeking a higher standard of living, Faupl noted.

And many people spend more as they earn more.

“Often, people create false narratives in their minds that they will be able to manage their debt because they make a higher salary or salaries. Long-term debt, in many cases, indicates someone is living beyond their means and not addressing it,” Faupl said. 

And although long-term debt is a big issue among higher-income households, lower-income households are more likely to carry debt, our poll found.

“Of course it makes sense that the people who are more likely to carry debt have lower incomes,” Gresham said. “They have to use credit cards as emergency money, given the current cost of medical expenses, educational expenses and housing,” she added.

See related: No end in sight for 2 out of 3 U.S. adults with debt, poll shows

The effects of long-term debt

Faupl said that for some, long-term debt can be extremely stressful – and it can cause a lot of conflict and relationship strain.

Some people shut down and try to hide the debt they have rather than seek help. Others continue with out-of-control spending because they feel hopeless that they can ever change.

“Often, people make poor financial decisions or become paralyzed when they are under long-term financial stress,” Faupl pointed out.

How to address credit card debt

If you’re in a relationship, it’s essential to discuss your spending habits to maintain open communication and decrease any potential relationship friction, Kaplan said. 

Secrets about money or debt lead to increased chances for divorce, Kaplan added. 

“To begin with, couples must maintain open discussions about money if they wish to grow old together and have enough savings to retire. Research shows time and again that avoiding conversations about spending or debt results in increased chances of relational demise or divorce,” she said.

Gresham said one good way to get out of credit card debt is to sit down each month and write down the amount you owe and the interest rate you’re paying, then compute exactly how much the loan is costing you in dollars. 

“Most consumers do not frame credit card money as a loan ... but if they did label it that way, they might begin to view it differently,” Gresham said. 

See related: Will 2019 be the year you finally get out of debt? 

Survey methodology

CreditCards.com commissioned YouGov Plc to conduct interviews with 2,504 adults, including 1,775 with credit card debt. The survey was conducted online Jan. 23-25, 2019. Statistical results are weighted to correct known demographic differences between the sample and the U.S. population.


Join the discussion
We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.




Weekly newsletter
Get the latest news, advice, articles and tips delivered to your inbox. It's FREE.


Updated: 03-18-2019