Credit card debt: Easy to fall in, harder to climb out

American credit card debt at the end of September 2017 amounted to $784 billion, the highest amount in more than nine years, per the Federal Reserve System Report. Only 35 percent of credit card users pay off their balance owed in full each month, according to

This leaves 65 percent who add to their balances each month, increases their debt over time and most often with accumulating additional credit cards. Incentives for you to own more cards are very apparent with retailers, and the ultimate cost for those who do add cards is very costly as credit card interest is extremely high, at an average of 15 percent, compared to small bank loans today. The average interest on credit card debt per household is some $1,300 per year.

Ownership of credit cards is at a 10-year high and there appears to be no stopping the trend. For households with credit card debt, the average is nearly $16,000, per Some 26 percent of the “silent generation” — those born between 1928 and 1945 — have credit card debt; 41 percent of the “baby boomers” (ages 51 to 69) carry debt and 39 percent of millennials (ages 18 to 34) carry debt. The credit card is now the preferred method of payment for Americans, edging out debit cards and cash, per

Why is use of credit so out-pacing the use of cash?

Much of it is purely psychological, as swiping a card is much easier than handing out cash for a purchase and waiting for your change. In some cases you may be hesitant to complete the purchase if you were using cash.

The very fast pace of online shopping has created more chance for extended credit to be utilized.

If you budget your spending, it is easy to forget the amount you already have spent in that area with card payments.

By using cash you will not have a problem with consumer credit card debt as cards allow you monies to spend that you may not have. Establishing a $1,000 emergency cash savings account will give another option for those unplanned bills.

When you make a large discretionary purchase with cash, you have to save up for it. That directs time to fully evaluate the practicality of the purchase you are proposing.

When cash is utilized at the end of the pay period, you have the option of saving or spending.

A change jar is great when paying with cash to save money. At the end of the day, deposit all coins in the jar to cash in at the end of the month and place into your emergency savings.

The cost of living has exceeded incomes for more than a decade, according to the Economic Policy Institute, and has caused increases in credit card usage.

With the increase in the cost of living, family savings have also been substantially reduced or eliminated for many families.

Make no mistake, retailers know you will spend more with a credit card than you would with cash. We are into the holiday season, and it will take discipline to not swipe the card for many of those gifts you will be purchasing.

Dean McFarland is a board member for the Central Indiana Council on Aging. Send comments to