Core Insights - The average credit score of individuals seeking counseling from GreenPath in 2025 was 582, a decline from 640 in 2020, indicating a worsening financial situation for consumers [1][7] - The average monthly budget shortfall for those seeking counseling increased significantly to $904 in 2025, up from $439 in 2020, reflecting rising prices and interest rates [4][8] - The average credit card interest rate for those seeking help was 28%, with the average rate on credit card debt at 22.3%, up from 16.28% in 2020 [6][7] Financial Counseling Services - GreenPath, based in Michigan, provides free debt counseling and budgeting assistance, serving clients nationwide via phone and internet [3] - The organization does not offer loans but helps clients manage their debts, with an average debt of $17,667 for those in their debt management program [12] - GreenPath's debt management program can lower interest rates, waive fees, and help clients pay off debts over an average of 50 months [13][14] Consumer Behavior and Debt Trends - Many consumers are relying on credit cards to cover everyday expenses due to affordability challenges, leading to a cycle of increasing debt [9][11] - The average budget deficit has grown significantly, with many households facing cash shortfalls of nearly $1,000 each month [3][5] - Consumers are encouraged to contact credit card companies directly to negotiate lower rates, as many issuers may be willing to assist [26][27] Proposed Legislative Changes - President Trump's proposal for a 10% cap on credit card interest rates has faced opposition from banking associations, which argue it could reduce credit availability [18][20] - Estimates suggest that a 10% cap could lead to over 136 million consumers nationwide losing access to credit cards [22] - The potential cap could force credit card issuers to change their business models, possibly limiting access for vulnerable consumers [24][25]

Quick Read Credit card interest rates reached nearly 21% as of Q3 2025. Paying off 21% debt delivers a guaranteed 21% return through avoided interest charges. Credit cards charge 17 percentage points above the Federal Funds Rate. Investors rethink 'hands off' investing and decide to start making real money Consumer finance expert Clark Howard has long maintained a straightforward position on credit card debt: it's a financial emergency demanding immediate attention. His reasoning centers on a mat ...

Group 1: Credit Card Debt Crisis - The total credit card debt in the U.S. has reached $1.233 trillion, with the average American owing nearly $8,000 on their cards [2][3] - Average interest rates on credit cards have exceeded 22%, with APRs for general-purpose cards climbing to 25.2% in 2024, reflecting the rising cost of consumer credit [7][8] - The debt crisis is exacerbated by the fact that many borrowers can only afford minimum payments, leading to a cycle of compounding interest that can trap them for over a decade [3][4] Group 2: Industry Profitability - Payment processors like Visa and Mastercard achieve profit margins of 65.7% and 59.8% respectively, while card issuers like Capital One earn a margin of 22.9% [5][8] - The industry's business model relies on consumers carrying balances, which allows card issuers to extract significant returns from interest and fees [5] Group 3: Consumer Behavior and Credit Card Use - Credit cards can be beneficial for cardholders who pay their balances in full each month, allowing them to avoid interest charges while earning rewards and building credit history [6][8] - The comparison of credit cards to cigarettes is criticized as oversimplified, as credit cards only become problematic when balances are not paid in full [6]

Quick Read Average American cardholder owes $7,886 with credit card interest rates near 23%. Issuer margins prevent Fed rate cuts from lowering credit card APRs for consumers. Minimum payments of 1-3% go mostly to interest, requiring decades to eliminate balances. Investors rethink ‘hands off’ investing and decide to start making real money Credit card debt has reached crisis levels, with the average American cardholder now owing $7,886. When combined with interest rates near 23%, this creates a ...

Core Insights - The case of Bryce illustrates the complexities of credit card debt and legal responsibility, particularly when family members are involved [2][3] - The average credit card balance in the U.S. was reported to be $6,735 in mid-2025, highlighting a common financial challenge faced by many Americans [2] Group 1: Legal Responsibility - Legal responsibility for credit card debt is determined by the account setup, not by who used the card; in Bryce's case, he is the primary account holder and thus legally responsible for the $40,000 balance [3][4] - The distinction between authorized users and joint account holders is crucial; authorized users can make purchases but are not liable for repayment, while joint account holders and primary borrowers are [4] Group 2: Impact on Credit Score - A high credit card balance can negatively impact credit scores due to credit utilization, which is a significant factor in credit scoring [5] - The large balance on Bryce's card can affect his credit report and future loan qualifications, emphasizing the importance of managing credit responsibly [4][5]

Core Insights - Americans collectively owe $1.233 trillion in credit card debt, with nearly half of all cardholders carrying balances month to month at an average APR of 22.83% [2][7] - Despite recent Federal Reserve rate cuts, borrowers face a persistent financial squeeze as credit card issuers maintain a consistent markup, meaning lower Fed rates do not provide meaningful relief for consumers [2][3] Credit Card Interest Structure - The Federal Reserve cut its benchmark rate to 3.72% in December, but credit card borrowers have seen minimal benefit due to a consistent 15 to 18 percentage point markup over the prime rate, which is about 3 percentage points above the Fed's rate [3][4] - Credit card interest rates are typically variable and tied to the prime rate, which follows Fed policy adjustments, but the issuer's margin remains constant, keeping absolute rates elevated [4] Debt Accumulation and Payment Dynamics - Daily compounding makes credit card debt particularly expensive; a typical $5,000 balance accumulates over $3 in new interest daily, leading to accelerated debt growth [5][7] - Minimum payments create a debt trap, where the majority of payments go to interest rather than principal, causing the balance to decline slowly and total interest paid over time to exceed the original amount borrowed [6][7]

Credit card debt can be embarrassing. Interest rates are often sky-high. A maxed-out card might feel like a symbol of poor choices or lax financial discipline. And card debt is especially embarrassing, apparently, to people who earn a lot. Roughly two-fifths of consumers with credit card debt have lied about the amount of their debt, according to a 2025 survey from LendingTree, an online lending marketplace. Among those with card debt who earn more than $100,000 a year, the share who lie about it rises ...

Core Insights - Despite a challenging financial year in 2025, a significant portion of Americans remains optimistic about achieving their financial goals in 2026, with 45% expressing confidence despite 49% feeling their financial situation worsened in 2025 [1] Regret No. 1: Not Building Savings - The primary financial regret of 2025 was the failure to save money, reported by 38% of Americans, highlighting the need for accountability systems to improve financial habits in 2026 [2] - Recommendations include setting achievable milestones, intentional budgeting, and treating savings as a non-negotiable priority, such as automatic transfers from paychecks or directing tax refunds into savings [3] Regret No. 2: Impulse Spending - The second most common regret was impulse spending, affecting 28% of individuals, often driven by stress and emotions [4] - To mitigate impulse purchases, creating a 'pause point' in decision-making is essential, with suggestions to wait 24 hours for small purchases and longer for larger ones [5] - Implementing simple rules, such as monetary limits on discretionary spending, can help reduce impulsive behavior [6] Regret No. 3: Racking Up Credit Card Debt - Accumulating excessive credit card debt was the third regret, reported by 21% of Americans, indicating a need for strategic debt management [7] - Understanding balances and interest rates is crucial for consumers to prioritize paying down high-interest credit cards while maintaining minimum payments on others [7]

A mortgage refinance exposed a financial secret that stunned a Chicago husband: his pregnant wife had quietly accumulated $50,000 in credit card debt. The 38-year-old man, identified as CJ, shared the situation on "The Ramsey Show," saying he was "terrified" after learning about the balance while the couple was already working to pay down other debts. Don't Miss: The ‘ChatGPT of Marketing' Just Opened a $0.85/Share Round — 10,000+ Investors Are Already In Warren Buffett once said, "If you don't find a ...

Thana Prasongsin / Getty Images Comparing your spending to the national average can help you see where you stand and take action before your debt becomes unmanageable. Key Takeaways The average credit card balance per borrower in the U.S. was $6,618 at in 2025, up about 1.2% from 2024. Total U.S. credit card debt is about $1.21 trillion, up 5.9% from the previous year. Keeping debt in check starts with limiting spending, making extra payments when you can, focusing on the highest-interest debt first, ...