July is the most happening travel month of the year. Americans jet off to beaches, national parks or theme parks, but nearly half are carrying more baggage than what is in their luggage.
According to WalletHub’s 2024 Credit Card Debt Survey, 46% of Americans are still paying down last summer’s credit card balance.
“And almost 25% of them reported being very stressed out about it, about their credit card debt in general,” WalletHub Editor Christie Matherne told Straight Arrow News. “And that’s probably because of this next stat, which is nearly half of people said that they carry debt on cards from everyday purchases, which can get really expensive.”
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With the average credit card interest rate of around 23%, people are quickly falling behind on payments. Credit card delinquencies are up across the country, though some cities are increasingly struggling more than others.
WalletHub said in Chula Vista, California, delinquencies are up 85% in the last year. The city that is best off is Des Moines, Iowa, where delinquencies are still up, though by a much smaller 19%.
“That’s bad news,” Matherne said. “That’s not great. That means people are late on their credit card bills, they can’t afford to pay minimum payments, and that lands you in further debt with further problems.”
Nearly 1 in 3 people told WalletHub they will have more credit card debt by the end of the year. 2024 already started with record-high credit card debt.
Although 80% of people told WalletHub that paying their credit card debt is a top priority, summer vacations can put a snag in those plans. Of the Americans traveling this summer, 36% told Bankrate they are willing to go into debt to pay for it.
“I do see the disconnect between that and charging your vacation on a credit card when you’re still paying off last summer’s debt,” Matherne said. “And it also might be worth saying that people need vacations.”
As much as people need a break, nearly 1 in 3 Americans told Bankrate they are skipping summer vacation this year because they cannot afford it.
Credit card debt is not just about personal finances. As more Americans carry higher credit card balances, that financial strain stretches beyond the home.
“A whole bunch of money is ending up in credit card companies’ hands and less of it is ending up in our communities,” Matherne explained.
That slows consumer spending, the most critical component of the U.S. economy. It drives two-thirds of the country’s economic growth. That is why credit card debt and delinquencies can be a harbinger of a downturn if things do not turn around.