American credit card debt has reached more than $935 billion. It’s time to help people tackle debt and get on top of their finances.
By Jessica Walter
By the end of 2019, there were 157 million Americans with outstanding debt on one or more credit cards, and this type of debt in the U.S. surpassed $1 trillion this past year. Compulsive spending is not simply about an occasional shopping spree. A person will do it on a regular basis. Despite the potentially devastating consequences, people still find themselves on yet another shopping binge to buy things that they don’t need and may not even want. These consumers often feel out of control when they are somewhere that they can spend money.
They also often lie about how much they’ve spent and even hide price tags and receipts. Unlike some other forms of addiction, overspending and credit card debt can be easy to hide. According to creditcards.com, as many as 12 million Americans have hidden accounts and credit cards from their partners.
How Easy Is It to Become Addicted to Overspending?
Although household income has grown over the past 10 years, it hasn’t been able to keep up with the increased cost of living. So more Americans now rely on credit cards to bridge the gap, and American credit card borrowing doesn’t seem to change very much over time. When the economy is suffering, borrowing is high, and when it is booming, borrowing is still high. In fact, regardless of how the economy is doing, Americans will have credit card debt.
The Federal Reserve published data that showed American credit card debt reached $935.6 billion by the end of 2019. On average, an American between the age of 18 and 65 has $4,717 of credit card debt. A study by the Boston Federal Reserve suggests that the reasons for so much debt in America is due to the high availability of credit. When credit is available, it seems we just cannot say no.
Why Do People Overspend?
Research suggests that compulsive spending links with other compulsive disorders, such as drinking, hoarding and gambling. Some overspending is connected to the need to compensate for loss or for being materially spoiled in the past. It can often be an attempt to try to buy happiness, to feel accepted and empowered, or to hide negative feelings.
People often find themselves falling into a vicious cycle. They go shopping to try to alleviate the stress they feel from being in debt, so the debt just continues to mount up, causing yet more concerns. As people get older, they also have increased financial pressures as income drops in retirement, and the financial options open to them become more limited.
How Do You Get Out of the Red and Back to Black?
Like with any addiction or compulsive behavior, stopping is not always easy. But admitting you have a problem is the first step. Don’t just feel that willing yourself to stop is enough. Professional help from a counselor can make a huge difference to your recovery. Just like with other addictions, there are support groups for people with spending problems. Debtors Anonymous runs meetings and offers support to help people tackle debt and get on top of their finances. This can often be the first step to financially take control over your finances and to get back on track.
Jessica Walter is a freelance health and nutrition writer.