13 Shocking Credit Card Statistics You Need to Know

Credit card debt is never a good thing, and Americans have a whole lot of it. This, we already knew. However, as the economy continues to bounce back from the Great Recession, generations grow older and change their spending habits, and the cost of health care keeps rising, there are several modern aspects of credit card debt that might shock your socks right off.

Here are 13 surprising credit card stats you need to know.

Even though incomes are rising steadily, and the job market is currently strong, people are borrowing money just as fast as they can make it. In fact, Americans are expected to collectively amass $4 trillion in consumer debt — which includes nonmortgage debts such as auto loans, student loans, personal loans, and credit cards — by the end of 2018, according to Lending Tree's 2018 Consumer Debt Report. Yes, you read that right. That's trillion with a 't'.

To speed up your journey to financial freedom, consider joining the gig economy to bring in some extra cash each month. Multiple income streams will help you make larger payments on those loans and credit card bills, and eventually, the weight of that consumer debt will be lifted from your shoulders.

This from a study by Credit Karma and Qualtrics also found that 73 percent of millennials who went into debt to keep up with their friends typically kept it a secret. The shocking part of this is that millennials are known to be more open than other generations. They share intimate parts of their lives on social media for the whole world to see.

On the other hand, the parts that they do share tend to be staged and curated to be aesthetically pleasing to followers, rather than a realistic peek into their daily struggles. They keep parts of themselves they consider to be "flawed" hidden from their friends and followers.

Keeping up with the Joneses is a game you'll lose no matter your age, because you're not spending money for you, you're doing it for someone else. The sense of pride you feel will be fleeting with every purchase made to compete with your friends, so you might as well surrender while there's still some money in the bank. The real victory will come the moment you achieve your personal and financial goals, which won’t happen without setting boundaries on your spending.

Despite the fact that some millennials have felt compelled to spend money to compete with their friends, many are making smarter financial choices overall. According to Experian's annual State of Credit report, they’ve also decreased their overall average debt by nearly eight percent, but have added six percent in mortgage debt.

This year, the oldest millennials will be turning 37, so they aren't exactly kids anymore. They're flourishing in their careers, and (gasp!) some are even getting married and buying houses. The media has portrayed this generation as killers of everything from beer, to the oil industry, to doorbells (yes, doorbells), but perhaps, instead of everything older generations hold dear, millennials would rather slay their own credit card debt and poor financial habits. Let's cut them a little slack, shall we?

Millennials, aka Generation Y, have essentially grown up on the internet, shaping the way we shop, and the way brands market their products to a very tech-savvy generation. But Generation Z is taking that two steps further, by establishing a stricter set of boundaries when it comes to brand loyalty (whether it's with a clothing brand they wear or a credit card app they use to buy said clothing), and living more mobile-centric lifestyles.

According to a 2017 study by Forrester Consulting on behalf of American Express, Gen Z and Gen Y both care deeply about the reputation and brand image of the brands they use, but when it comes to bailing on a brand or service due to responsiveness on social media, Gen Z is 21 percent more likely to do so, than Gen Y at 9 percent.

Gen Z wants a seamless customer experience, they want their private information protected, they are 23 percent more likely than Gen Y to prefer receiving offers, incentives, and sales notifications on social media, and are 100 percent more likely to prefer interacting via online chat technology. And brands are shifting their tools and marketing campaigns to meet those needs.

Who doesn't love credit card rewards? Whether they come in the form of points, miles, gift cards, or cash back, it's bonus money you earn by spending money as you normally would. However, not everyone takes advantage of their rewards. According to a 2017 Bankrate report, about three in 10 cardholders never redeem their rewards, leaving that bonus money to collect dust when it could be spent on food, gas, entertainment, or even travel.

Avoid being part of that 31 percent by cashing in the rewards you've earned, only signing up for credit cards with rewards you'll actually use, and resisting travel cards unless you're in a place to pay off your balance in full each month — otherwise, the higher interest you'll pay with these cards won't be worth the travel rewards you can earn.

By the end of 2016, American credit card debt had toppled over the $1 trillion mark, according to The Nilson Report. That's greater than the GDP of all but 15 countries. Sure, we knew our credit card spending was a bit excessive, but that's a whole lot of credit card debt for one country.

If you find yourself holding your breath every time you open that monthly statement, you could try one of two beloved credit card payment methods: the Debt Avalanche and the Debt Snowball. In the Avalanche method, you focus on paying off the credit card with the highest interest rate first. Once that card is paid off, you move onto the card with the next highest interest rate. With the Snowball method, you start with the card with the smallest balance first, and follow the same process until you're looking at that credit card debt in the rearview mirror as you speed off into the sunset.

After paying off your credit card debt, you can move on to rebuild your credit and start your journey to financial independence.

For a moment, think about what $900 could do to improve your life. How many bills could that $900 pay off? How many dinners could that buy? Or how much peace of mind would you get from having that in your emergency fund?

It might not sound like an earth-shattering number, but for many American families, $900 could go a long way, which is why it's so frustrating that the average household with revolving credit card debt pays $904 in interest annually, according to a 2017 survey by NerdWallet and Harris Poll. That's over $900 just to keep a credit card balance from one month to the next.

To avoid wasting this thick stack of cash on annual interest, send as much as you possibly can to your credit card companies each month. Anything above the minimum amount will help chip away at that debt. Set up autopayments by linking your bank account to your credit card so that your credit card bill is paid on time every month. You can also try transferring your credit card debt to a card with a 0 percent APR introductory period, so you have some time to pay that debt down without having to pay interest.

While it might seem like those doorbell-killing millennials are walking around with maxed out credit cards in their wallets, it turns out consumers ages 35 to 65 carry the most credit card debt. According to Experian's State of Credit report, this is particularly true for people between the ages of 45 to 54. You know what they say: With more power, comes more (financial) responsibility.

However, it's likely that this age group is also facing higher costs of living, more housing expenses, and dependents to support. And luckily, credit scores also seem to rise with age, with the average credit score for Baby Boomers just over 700, and credit scores for the Silent Generation averaging at 729.

Where would you expect the most responsible credit card users to live? In city centers where salaries are generally higher? In rural areas where cost of living is low? On the West Coast where Silicon Valley is exploding with innovative ideas and profitable startups? Let's stop guessing, because the winners of this title are the Midwesterners and the folks living near the Great Lakes, according to Experian's State of Credit report.

Residents of Iowa have the lowest average credit card debts (average balance being just over $5,000), and people with highest average credit scores (709) can be found in Minnesota.

Though the Midwest is home to those with the lowest debts and highest credit scores, the biggest state in the U.S. takes the title of highest average credit card debt (average credit card balance is $8,515), with 20 percent more debt than the next-highest state of Colorado.

And when it comes to the lowest credit scores in the country, we need to head south to Mississippi, where scores average at 647.

Men and women have been pitted against each other in virtually every conceivable category, but when it comes to their revolving debt ratio, it's a tie! According to data by Experian, men and women have a revolving debt ratio of 29.9 percent.

However, Experian also found that women have 3.7 percent less average debt than their male counterparts, and their average credit scores are five points higher, at 675.

With health care costs always on the rise, many Americans are forced to charge their medical bills and slowly pay those balances down. According to NerdWallet’s 2017 study, this habit is costing people an average of $471 in interest for a year’s worth of out-of-pocket medical spending.

Using a credit card to pay these bills should really be a last resort. Some hospitals and medical offices offer in-house payment plans for patients, and even if they charge interest, it'll likely be less than your card's APR. You can also inquire about local charitable organizations that may help, ask if the hospital has a charitable funds program you can apply for, or consider taking out a personal loan — which is not ideal, but again, the interest will be lower than most credit cards offer.

And don't be afraid to negotiate those line items on your medical bill. You never know when someone in the billing department might be in a good mood and willing to give you a discount.

When you open a new credit card account, it's a big deal. You've thought it through, found a card that offers interesting and competitive rewards (that you know you'll use), and you're ready to take on that new hard inquiry.

Well in 2016, apparently everyone in America went through the same process, because the Bureau of Consumer Financial Protection found that consumers opened around 110 million new credit card accounts that year. And that turned out to be roughly 50 percent higher than the number of accounts opened in 2010.

But is that number too high? It depends. There's really no such thing as "too many credit cards" because it's all about how you use those lines of credit. If you use them responsibly, you'll likely get approved to open several new cards. The rub here is that you need to use credit cards enough to keep the accounts open, but not so much that you can't pay the balances in full each month. So for many people, the fewer the credit cards, the less of a headache you'll have when it's time to pay the bills each month.

This article by Janet Alvarez and Chrissa Hardy was originally published on Wise Bread.