Question of the Day: How much did consumers pay in interest to credit card companies in 2017?
Answer: $104 billion
- Why do you think that so many Americans carry credit card debt, meaning they don’t pay the full balance on their credit card statements every month?
- Does credit card debt carry a high or low interest rate?
- What ideas do you have on how you can avoid getting into credit card debt where you can't pay your balance off every month?
- Imagine using your credit card to buy $100 of clothes. If you weren’t able to pay off that purchase for a year and your credit card had a 20% interest rate, how much would you pay in interest alone? [You would also pay late fees if you made no payments.]
Behind the numbers (from MarketWatch):
Additional interest-rate hikes can hurt those carrying large amounts of debt. Americans carry a collective $687 billion in credit-card debt that is not paid in full each month, Clements said. That breaks down to an average balance of $6,348 for people with credit cards, according to the credit agency Experian.
Looking for an awesome activity for students to see the cost of credit? Check out NGPF's Analyze: Should They Open A Credit Card Account?
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.
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