According to the Transunion Industry Insights Report, the average credit card debt is $5,142. This number is a difficult one to pin down because companies who do the research don't always use the same factors for the calculations. But the average per TransUnion (as of the end of the first quarter of this year) seems to be a fairly accurate estimate.
Is Your Credit Card Debt Higher or Lower Than the Average?
Hopefully, your response is, "I don't have any credit card debt." But given that, according to the Federal Reserve's G19 report, the total outstanding revolving debt at the end of September 2015 is $925.2 billion, there's a good chance you might have a little debt.
The TransUnion report also took a look at average debt by state. The states with the highest increases from one year to the next (from Q1 2014 to Q1 2015) in average credit card debt are South Dakota, Hawaii and Virginia. The states with the biggest decreases from one year to the next are Colorado, Georgia and Texas. You might wonder why it's helpful to compare yourself to the average credit card debt per state.
Well, each state has its own economy and that means there are good times and also financial hardships that occur locally. This can certainly impact your cash flow and your ability to pay off your credit card balances. So if your debt is higher than the average, your local economy may have contributed to it.
While it's informative to look at the averages, don't obsess over it. Remember, your situation, which includes your job, cash flow, expenses and so forth, is unique. The most important thing to do is to take action and make a plan to get rid of the debt.
How to Tackle Your Debt
Okay, at the end of the day, it doesn't matter at all where you stack up in the "average credit card debt" conversation. The important thing to do now is to make a vow to take back your financial life. If you still have excellent credit, you can consider using a balance transfer credit card to pay down your debt.
In this scenario, you'd transfer your current debt from a credit card to a balance transfer credit card that offered a zero percent introductory APR for a period of time. This allows you to pay off – or at least reduce – your debt while paying zero interest for a specified number of months, which can range from six months to 21 months.
If you don't qualify for the best offers, you might also consider getting a debt consolidation loan. With this loan, your objective is to get an interest rate lower than the one you're currently paying. While you still have to pay interest, it's an opportunity to pay less interest so you still save money.
And, of course, you can also attack your debt by paying more than the minimum amount each month. Go through your budget and decrease as many expenses as possible. You can then use the "extra" cash to pay more than the minimum monthly payment.
Getting out of debt is painful, but if you stick with it, you can do it. Once you're out of debt for good, you won't have to worry about comparing yourself to the average credit card debt in America again.