More Americans Are Paying Off Their Credit Cards Every Month
Americans have developed better credit card payment habits over the last few years, according to a new study from the FINRA Investor Education Foundation.
In 2015, 52% of participants said they always pay their credit cards in full, compared to just 41% in 2009. In addition, only 47% said they carried a balance over from one month to the next versus 56% in 2009.
With regards to fees, only 8% of those surveyed in 2015 said they were charged an over-the-limit fee for exceeding their lines of credit, compared to 15% in 2009. 14% said they were charged a late fee for not making a payment on time, while 26% said the same thing six years prior.
This all indicates that Americans are getting better about making credit card payments on time and controlling their spending, which could bode well for the country’s economy.
Even though Americans appear to be better managing their accounts, there is still room for improvement. The survey concluded that 39% of card holders engage in “expensive credit card behaviors,” such as only paying the minimum balance on the card each month or using the card for cash advances. A staggering 52% of Millennials are likely to engage in these practices, far more than any other age group. By comparison, only 24% of people over the age of 55 use their cards in ways that “generate sizeable interest or fees.”
One of the best ways to avoid hefty credit card fees is to make sure to get the best credit card for your specific needs. You can compare credit cards based on their annual fees, late fees, over the limit fees, interest rates, and other factors to determine which card suits your spending habits. Only 35% of respondents said they compared credit cards when they applied for their most recent card.