How Not to Be Average When it Comes to Credit Card Debt

by Ryan Yates

Average Credit Card Debt

Yes!! I'm average!

It’s summer!

Time for baseball games, road trips, theme parks, vacations, movies, shopping, and whatever else your heart desires.

You may have free time this summer, but all of this excitement will come with a price.

The question is, do you have room in your budget for your list of summertime adventure, or do you plan to put everything on your credit cards?

Average Credit Card Debt in America

Like a humorous financial commercial once said, Americans are “up to their eyeballs in debt”. The average American household has approximately $10,700 in credit card debt, according to CNN Money, and the average interest rate stands at 14.83%.

Credit card debt is up nearly 50% compared to a household debt average of $5,219 in 2004. Depressed yet? Well don’t be. It may be tough to overcome so much financial baggage, but it’s not impossible.

Average College Student Credit Card Debt

For some of us, credit card debt started in college when we thought a free t-shirt was worth the price of filling out a credit card offer. Sadly, the free t-shirt wasn’t worth it. According to a study by Sallie Mae in 2009 (the last time this study was performed) the average undergraduate carried $3,173 in credit card debt.

Freshman had an average credit card debt of $2,038 while seniors graduated with a stunning $4,138 in the red (not counting student loans). Sallie Mae’s research found that more and more students are charging tuition, books, and other miscellaneous school supplies to their credit cards.

And they’re doing so more often: “Students charged an average of $2,200 in educational expenses to cards, up 134% from four years earlier.” (source:

Wow! I remember paying for books with money left over from my financial aid check, but I graduated in 2003 from a local state university.

How Not to Be Average with Your Credit Card Debt

No matter when you began carrying a balance that you couldn’t pay off, I think we can all agree that getting out from under the pressure of credit card debt is a top priority. The following tips will help you stay away from the “average” pitfalls of excessive credit card debt (i.e. how not to be average).

Get a Handle on Your Spending

A good place to start whittling down your credit card debt is to control your spending habits. Most people spend hundreds, even thousands of dollars each month without knowing exactly where their money goes.

Use your last statement to make a list of everything you spent money on in the last month, then cut back on the things that you don’t need. You can put the money you have left over each month into a savings account, or you can use it to reduce your debt.

Don’t Just Pay the Minimum

Paying the minimum monthly payment on your credit card statement will barely cover the interest being charged on your card’s balance and will extend your debt for years to come.

If you stop spending now and only make the minimum payments on $10,700 of credit card debt (with an APR of 14.83%), it will take you 12 years to pay everything off and you will have paid $4,693 in interest alone.

The minimum payment keeps you in good standing with your credit card provider, but it does little in the way of actually eliminating your debt.

Create a Budget and Stick to It

Your goal should be to spend less than you earn. To some this is a shocking statement, to others it is very reasonable. Four quick budget tips are:

  • Identify and prioritize financial goals. What needs to be done about your financial landscape and what would you like to happen?
  • Analyze how your money is currently being spent. Where is all of your money going each month? Are your wants outweighing your needs?
  • Evaluate the spending habits you have uncovered and compare them to your financial goals. What are you doing right and what needs to change?
  • Continue to track your ongoing spending and make sure that your new spending strategy stays within the guidelines that you have set up in your budget.

Identify and Save for Luxuries

Everyone wants something that they can’t immediately afford with their current income, but that doesn’t mean you should automatically charge those extra desires to your credit cards.

Instead, acknowledge luxury items for what they are and develop a plan to save up for them. Also, beware of wants and luxuries that are dressed up as necessities.

Being smart about your finances doesn’t mean that you can’t have any fun; it just means that you need a good overall financial strategy and you need to stick to it. Start saving for your summer vacation in January, sit in the outfield instead of behind home plate, adjust the scale of your road trip to fit your budget.

You won’t fall into the “average” if you have a sound financial strategy.

What’s your take on the situation? Why have you become tangled up in so much credit card debt? What are some strategies or guidelines that you have found to be successful at overcoming your credit card balance?


Mike Young June 14, 2011 at

Somtimes, you may have to even delay buying “needs”. For example, if your dishwasher breaks and you don’t have money to buy one, you may have to do dishes by hand for a few months (oh, the humanity!) This happened to my wife and I a couple of years ago. It wasn’t that bad and we still had zero debt when it was all done: well worth it!

Forest June 15, 2011 at

Good motivation Jeff. It’s hard when you can’t do things but my life has been improved dramatically since I stopped depending on the CC’s and seeing money in my account is almost as fun as doing the stuff I sometimes miss out on!

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