Credit Card Debt By Age And Income

MoneyTips

According to Federal Reserve data, America’s outstanding revolving debt – mostly credit card debt – stood at $1.055 trillion at the end of 2018. Who holds most of that debt?

ValuePenguin’s report on average credit card debt in America shows that households with the lowest net worth (zero or negative) have the highest average debt ($10,307). However, with respect to age and income levels, ValuePenguin data suggests that you’re more likely to hold the most debt if you are from 45 to 54 years old and have an income greater than $160,000.

Isn’t that contradictory? It seems that way at first glance, but there’s a difference between net worth and income. Households with higher incomes carry higher balances because they’re more likely to be able to pay them off whenever they choose. Households with no net worth are more likely to carry high balances because they have to.

Variou…

Debt Lasso Method Of Paying Off Debt

MoneyTips

If you’ve ever carried credit card debt (and most of us have), you know how difficult it can be to get out from under it. The Federal Reserve’s data shows that as of the fourth quarter of 2018, the average APR for all credit card accounts is 14.73%. With interest rates like that, it’s no wonder so many Americans struggle to pay off credit card debt.

When you’re ready to tackle your debt, it pays to be strategic. There are several approaches you can take. Popular examples include the Snowball method and the Avalanche method. The Debt Lasso method is a little more complicated but can save you money on interest and get you out of debt sooner.

The Debt Lasso Method: How it Works

The Debt Lasso metho…

4 Of 9 Credit Card Applications Submitted On Mobile Device

MoneyTips

You probably receive plenty of credit card offers, through both direct mail and digital methods like card issuer e-mails and social media ads. Which path is more effective? If you aren’t receptive to a new credit card offer, neither path works – but for consumers who are interested in a new card, digital methods are preferred.

The new Credit Card Response Rate Report from Mintel Comperemedia collected input from 3,000 consumers and found a significant trend toward digital credit card submissions. Credit card marketing offers are almost equally split between digital and non-digital methods, but nearly three-quarters (73%) of completed applications are received digitally. The remaining 27% are divided among in-person applications (11%), non-mobile phone applications (8%), and replies by mail (8%).

The convenience of mobile devices may also be aiding this trend. According to the Mintel report, 4 in 9 (44%) of all credit applications are completed using smartphones o…

8 In 10 Americans Want More Credit Card Protection

MoneyTips

Prior to the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009, restrictions on credit card issuers were loose at best. In the wake of the Great Recession, the CARD Act imposed proof-of-income limits on card applicants under 21 years of age without an adult co-signer, set limits on interest rate increases on existing card balances, and directed payments above the minimum toward higher interest balances.

In addition, the CARD Act increased card issuer disclosure requirements. Cardholders must be told how long it will take to pay off an existing balance at the minimum monthly rate, and issuers now follow a standard template on fee and penalty disclosures.

As the CARD Act passes the ten-year milestone, CompareCards.com decided to survey over 1,000 consumers to evaluate the CARD Act and gather opinions on credit card regulation. An overwhelming number of respondents agreed that more should be done to protect consumers.

Only 6% of…

Should You Pay Your Taxes With A Credit Card?

MoneyTips

It is hard to beat the convenience of a credit card for purchases, but does that same convenience make it worth paying your taxes by credit card? It might, but that depends on several factors involving money and time. “Your credit card is usually a high-interest option, but it is an option,” explains Betterment Head of Tax Eric Bronnenkant.

Before deciding whether to put your tax bill on plastic, consider the following:

  • Fees – By law, the IRS cannot pay credit card transaction fees. As a result, credit card payments to the IRS are handled through secure third parties approved by the agency. See the IRS website for a list of the approved payment processors and their fees.

    Credit card fees are percentage-based with a minimum “convenience fee” for smaller bills ranging from $2.50 to $2.69. Percentages range from 1.87% to 1.99…

When Credit Card Debt Is Tax-Deductible

MoneyTips

Wouldn’t it be nice if you could deduct your credit card debt from your taxes? For most Americans, that’s just a dream that will never come true. However, some circumstances allow you to deduct some credit card debt – all related to using your card for business purposes.

The 2017 Tax Cuts and Jobs Act raised the standard deduction and eliminated or reduced certain itemized deductions as part of a tax simplification effort. It’s critical for those who still itemize to take advantage of all possible deductions. Self-employed taxpayers and small business owners who rely heavily on credit cards may be able to save by taking advantage of credit-related deductions.

Credit card debt on personal purchases is not tax-deductible, thanks to the 1986 Tax Reform Act. However, three varieties of business-related credit card debt may be deductible.

Interest on credit ca…

Achieve Financial Literacy!

MoneyTips

April is National Financial Literacy Month. Why do we dedicate this calendar page to highlighting financial skills and education? The tax deadline? Sound financial decisions are important all year long, but most Americans never learned how to manage money or save for goals, so financial security is a bigger challenge than it needs to be.

Even if you can handle the math involved — and calculators can help if you can’t — things get complicated when making large (often emotional) financial decisions. Some of the most common pitfalls are described below. If you recognize any of them, you’re not alone. The good news is that you have an opportunity to improve your finances and save more money.

Emergency Preparedness

An emergency fund is essential because you need to absorb life’s surprises without making things worse. Without a stash of cash, you’ll have to take…

13 Ways To Prevent Credit Card Fraud

MoneyTips

You’ve taken steps to avoid identity theft, and maybe even applied a credit freeze to your credit report. You can sit back and relax, right?Wrong. You may have prevented identity thieves from opening new accounts in your name, but have you kept your existing credit accounts secure?

As opposed to identity theft where your information is used to create unauthorized accounts in your name, credit card fraud refers to a single existing account. A thief has stolen your card or has the necessary card information to make unauthorized purchases on that account.

How do you prevent credit card fraud? Here, we offer thirteen possible precautions:

1. Avoid Ph…

Millennials Not Smart When It Comes To Credit Cards

MoneyTips

New Survey Shows Poor Credit Habits of Millennials

Americans must love credit cards. As of the end of 2018, Federal Reserve data shows that we have racked up $870 billion in outstanding credit card debt on our nearly 480 million credit cards in circulation. However, generations vary in how they handle credit card debt.

Millennials tend to be the most cautious with credit – perhaps because many of them came of age during the housing crisis and subsequent recession. Data from the 2017 Experian State of Credit Report found that Millennials hold an average of 2.5 credit cards, while older generations hold from 3.0-3.5 cards on average. They also carry a lower average balance of $4,315, compared to $7,750 for Generation X, $7,550 for Baby Boomers, and $4,613 for the Silent Generation.

A new survey suggests that Millennial caution is warranted. The recent TD Bank Consumer Spending Index uncovered several unhealthy Millennial credit habits.

No…