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Even People With Good Credit Struggle With Credit Card Debt, Survey Shows

[Tuesday, October 10th, 2017]

You might think that carrying credit card goes hand in hand with having a bad credit score, but a recent survey found that plenty of folks with good credit are in credit card debt.

More than one-third of creditworthy Americans are carrying credit card debt, the Marcus by Goldman Sachs study found. Good credit was defined as a score at or above 660, on a scale of 300 to 850. Thirty-eight percent of those with scores of at least 660 were carrying a balance from month to month on at least one credit card. Over half of those people (52%) said they feel that their finances are out of control, and 40% are embarrassed by their credit card debt.

People get into credit card debt for various reasons; often an emergency expense like a necessary household repair, a child’s orthodontic work, or a car that breaks down strains the household budget and causes a family to put charges on a credit card that they cannot easily pay off. Sixty-four percent of folks with credit card debt chalked it up to medical expenses, and 41% said an injury put them into debt.

Credit card debt impacts people’s lives

Forty-two percent of those surveyed said that having credit card debt keeping them from moving forward in their lives, and 51% felt that debt was one of the biggest issues impacting them. Andrea Woroch, a consumer finance expert working with Marcus, said the findings indicated that even people with responsible financial habits are having trouble staying out of debt. These people “feel immense financial pressures,” said Woroch. “More than half of them don’t feel in control of their finances, which greatly impacts their lives.” She said there was a need for “a better understanding of options that can help them navigate their debt.”

One option for people who want to use a credit card while making sure they don’t get into debt they cannot pay off is to apply for a secured credit card. These cards, which are available to consumers with a range of credit scores, require cardholders to put down a deposit to act as collateral. Their credit limit will be equal to the amount of the deposit, so if they default on the loan, the issuing institution can simply apply the deposit to the debt.

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