Credit card debt prevents nearly 20% of Americans from becoming homeowners

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As Americans deal with high inflation and a heated housing market, growing credit card debt poses a major barrier to homeownership.

Credit card debt has prevented one in five or around 18% of those with credit card debt from purchasing a home in 2022, according to a recent credit card debt study by real estate data company Clever. 

In fact, 46% of Americans say credit card debt hindered their efforts to purchase a home a lot or a great deal, according to a recent survey by Rocket Homes. Another 36% said it hindered their efforts a little or a moderate amount. 

Credit card debt was a larger threat to homeownership than student loans and medical debt, the Rocket Homes survey also noted. 

And credit card debt continues to pile up for many consumers. Credit card balances increased by $38 billion in the second quarter, marking a 15% year-over-year increase and the largest spike in more than 20 years, according to a report by the Federal Reserve Bank of New York.

If high-interest credit card debt is getting in the way of buying a home, consider paying it down with a personal loan at a lower interest rate, which can save you money each month. You can visit Credible to compare loans from multiple lenders at once, without affecting your credit score. 


Americans are accruing credit card debt amid high inflation

Credit card balances carried over from month to month are held by 41% of adults aged 30-plus, according to an economic survey by the AARP. Respondents also said everyday expenses were the top reason for credit card debt.

The average amount of credit card debt stood at $7,100, according to a separate debt survey by the AARP. 

“Consumers of all ages are feeling the impact of inflation,” Gary Koenig, the vice president of financial security at AARP, said in a statement. “Many living on a fixed income have had to cut back on basics, while others have struggled with debt or delayed their retirement plans altogether. Rising prices not only impact consumer spending, it makes managing debt and saving for the future a steeper hill to climb.”

If you’re struggling with high-interest credit card debt, you can consider consolidating it into a personal loan with a low interest rate, saving you money each month. You can visit Credible to speak to a personal loan expert and see if this option is right for you. 


Credit card debt may get in the way of consumer spending

In addition to homeownership, credit card debt is also impacting many consumers’ shopping plans.

Many shoppers (70%) say they took inflation into consideration during the past holiday season and 51% percent said they would buy fewer things due to inflation, according to a survey by RetailMeNot. The survey also found that 27% of consumers planned to scale back on gift giving and 24% were spacing out purchases over the next several months. 

In addition, shoppers shrank their holiday budgets. RetailMeNot found that consumers planned to spend $725 on average, 8% less than they did the year before.

“The last couple holiday seasons have been a wild ride for retailers and shoppers alike,” RetailMeNot wrote in its survey report. “The pandemic, supply chain issues, staffing challenges and shipping delays have all drastically changed the holiday shopping landscape, leading to unprecedented shopping season after unprecedented shopping season.”

Inflation continues to drive up costs and economic uncertainty is throwing shoppers and retailers alike for a loop, according to the report.

If holiday debt is a burden going into the new year, you can consider paying it off with a personal loan at a lower rate. You can visit Credible to get your personalized rate in minutes.


Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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