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Understanding Rising Credit Card Debt and How O1ne Mortgage Can Help

In recent years, credit card debt has been on the rise, reaching nearly $1.07 trillion in 2023. This increase in debt is a reflection of changing consumer habits, elevated interest rates, and ongoing inflation. As a result, many consumers are finding it challenging to manage their finances. In this article, we will explore the factors contributing to the rise in credit card debt and how O1ne Mortgage can assist you in managing your financial needs effectively.

Overall Credit Card Debt Increases to Nearly $1.07 Trillion in 2023

According to Experian data, total credit card balances grew by $157 billion, ending Q3 2023 at nearly $1.07 trillion. This 17% increase from Q3 2022 was spread over a larger credit card account base, which grew by more than 8% over the same period. The number of credit card accounts in the U.S. reached 568.6 million in Q3 2023, an increase of 62.4 million from the previous year.

Average Credit Card Balance up 10%

The average credit card balance among consumers was $6,501 as of Q3 2023, exactly 10% more than in Q3 2022. This increase in average balances is a result of higher monthly bills, elevated interest rates, and inflation. States in the Western U.S. saw the most significant increases, with average balances rising by at least 11% in 2023.

Average Credit Utilization Inches Up

The average credit utilization ratio among consumers climbed to 29% in 2023, a result of average balances growing faster than average credit limits. Utilization is a significant factor in credit score calculations, and lower utilization ratios are generally better for maintaining a good credit score.

Millennials Have Fastest-Growing Average Credit Card Balances; Gen X the Highest Average Balances

In 2023, the average credit card balances of millennials increased by 15.4%, the most of any generation. However, Generation X has the highest average credit card balance at $9,123, exceeding the nationwide average by more than 40%. This indicates that while millennials are rapidly increasing their credit card usage, Gen X carries the most significant debt burden.

Higher Monthly Bills May Be Impacting Credit Card Balances

Experian’s survey of 1,237 credit card users revealed that 58% of respondents indicated their monthly bills have recently increased significantly. Among them, 75% said new or increased bills have impacted their ability to pay down their credit card balances. The most common culprits were insurance premiums and utilities, which have seen substantial increases in recent months.

Credit Card Trends to Look Out For in 2024

As we look ahead to 2024, several trends are expected to impact credit card usage:

• Consumers may increasingly use credit cards to pay monthly bills due to higher costs of living.
• Banks are becoming pickier with lending, offering lower credit limits and requiring higher minimum credit scores.
• Climbing APRs and balances make refinancing an attractive option for many consumers.

How O1ne Mortgage Can Help

At O1ne Mortgage, we understand the challenges that rising credit card debt can pose. Our team of experts is here to help you navigate your financial needs and find the best solutions for managing your debt. Whether you’re looking to refinance existing debt, consolidate loans, or explore other financial options, we are here to assist you every step of the way.

Contact O1ne Mortgage today at 213-732-3074 for any mortgage service needs. Our dedicated team is ready to provide you with personalized solutions to help you achieve your financial goals.

Conclusion

The rise in credit card debt is a significant concern for many consumers. By understanding the factors contributing to this increase and exploring options for managing debt, you can take control of your financial future. O1ne Mortgage is here to support you with expert advice and tailored solutions. Don’t hesitate to reach out to us at 213-732-3074 for all your mortgage service needs.

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