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Financial Literacy Month Is a Great Time to “Take Charge” of Your Credit
FRB of St. Louis
2024.04.18
April is Financial Literacy Month, which means it’s a great time to take stock of how you’re managing your finances. Checking your credit card balances is an excellent place to begin.
U.S. credit card debt made the news last summer when it exceeded $1 trillion for the first time. Despite fading from the headlines in recent months, credit card debt has continued rising.
The Federal Reserve Bank of New York Quarterly Report on Household Debt and Credit notes that credit card balances had grown to a total of $1.13 trillion, increasing $50 billion in the fourth quarter last year. Other debt levels rose as well. In fact, total household debt is at a historic high of $17.5 trillion.
The national credit situation is gloomy, and things aren’t that much different locally. Individuals ages 20 to 64 in the St. Louis region have an average of $4,580 in credit card debt. That is just a bit lower than the national average of $4,837, according to year-end 2023 data calculated by the St. Louis Fed from the Federal Reserve Bank of New York Consumer Credit Panel/Equifax.
Credit card debt can be difficult to manage because of high interest rates on balances carried past the grace period; according to Forbes Advisor, the average credit card interest rate was 27.9% as of late March.
Given credit card debt’s high cost, you might ask why people carry so much of it. One explanation involves psychology.