Medical Expenses a Leading Factor in Credit Card Debt
While student loans are a leading contributor to overall debt burdens, it turns out that medical bills are the leading contributor to credit card debt.
The New York Times reports that the average amount of credit card debt from out-of-pocket medical costs in low-to-moderate income households is $1,678.
More than 75% of the surveyed households had out-of-pocket medical costs in the past three years and well over half of them said those costs contributed to their current credit card debt.
Half of them also said that they had put off filling a prescription or skipped a doctor visit or test to reduce their medical expenses.
The same survey, which included 997 adults who had carried credit card balances for at least three months, found that average credit card debt has declined to $7,145 from $9,887 in 2008, and that 40% of households are using credit cards when they don’t have the money to cover daily costs such as mortgage or rent payments, groceries, utilities and insurance.
Credit card debt is considered “bad debt” because it damages your credit score. Generally, credit cards have high interest rates and don’t vouch for your trustworthiness like, say, a mortgage might.
If you have credit card debt, don’t let it get you down–let it get you moving! Start with the stories of LearnVesters Dana and Laura for inspiration, then sign up for our free Get Out of Debt Bootcamp, which will walk you through your liberation step by step.