Become Debt-Free

55% of Americans with credit cards have debt—here's how much it could cost you

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Americans' debt is on the rise. The Federal Reserve Bank of New York recently found that the overall debt held by American households is now higher than previous peaks seen ahead of the 2008 financial crisis. And with credit card interest hitting record highs, it can be more expensive than ever to let that monthly balance roll over.

U.S. households added $26 billion in credit card debt, the biggest increase among debt categories tracked, in the last quarter of 2018. In fact, 55% of U.S. adults who have credit cards report also having debt, according to a new survey of approximately 2,200 U.S. adults that CNBC Make It performed in conjunction with Morning Consult.

Over the past year, 22% of respondents say the average balance they carried was between $100 and $500, while about one in 10 people say they had a balance over $5,000, the survey found.

Carrying a balance on a credit card can become a significant expense itself, especially since the average credit card APR has never been higher: It's currently sitting at 17.73%, according to CreditCards.com. Because of that, the interest accrued on monthly balances can quickly add up.

Let's say you have $4,293 in credit card debt, which is the national average among those who carry a balance, according to Experian. If your card charges the average APR and you pay the minimum each month (3%, which is roughly $129 to start) you'd stay in debt for about 15 years and put more than $3,800 toward interest.

If you can't avoid carrying a balance, look for a credit card that offers a low interest rate rather than racking up debt on a card that comes with fancy perks, but has a higher APR, Ted Rossman, a credit card analyst for CreditCards.com, tells CNBC Make It.

"I love using credit cards for the rewards and other perks, but carrying a balance quickly wipes away the value of any rewards you might earn," Rossman says.

If you already carry a balance and are looking to pay it down, it may be worth considering opening a new credit card that allows you to transfer over your balance without accurring more interest. The key is to look for one that doesn't charge you a balance transfer fee and offers an extended 0% APR period. Ordinarily, cards that allow balance transfers can charge a fee of 3% to 5% to move your balance from one card to another, which can add up.

You may not have to forgo the rewards forever, though. Once you pay down your debt and eliminate your monthly balance, you'll be able to spend toward earning rewards. For example, a credit card like the Amex Everyday offers a 0% APR on balance transfers for 15 months. But the card also rewards users with two points for every dollar spent at grocery stores and one point per dollar on all other spending.

Correction: An earlier version of this story did not specify that the percentage of Americans with credit card debt was among those who currently own credit cards. 

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