Study: Consumers Saddled by Credit Card Debt and Overdraft Fees

Study: Consumers Saddled by Credit Card Debt and Overdraft Fees

A recent survey by MagnifyMoney shows that 35% of Americans overdraft and 42.4% are saddled by credit card debt. The survey, which was conducted by SSI for MagnifyMoney, showed

  • 35% of consumers have gone into overdraft in the last year.
  • 42.4% carry credit card debt, with an average balance of $10,902.
  • 75.7% pay an interest rate higher than 15%, despite interest rates close to 0%.
  • 73.4% of people with savings keep their money in traditional bank accounts that pay close to 0%   interest.

The study concludes that many consumers are running into financial trouble due to choosing the wrong financial products and lack of financial knowledge.

About 35% of Americans have gone into overdraft, about 2.5 times in the last year.  The study showed that about 53.2% said they overdraft because they are forgetful, and 46.8% said they overdraft because due to lack of money.

Age differences can be seen when it comes to overdrawing a bank account. Millennials are more likely to overdraft, with 39.5% saying they overdrew their account last year. The Consumer Financial Protection Bureau reports the average overdraft and Non Sufficient Fund fees paid by consumers who overdraft is $225 a year.

Furthermore, the survey shows that the 42.4% of Americans who carry credit card debt have an average balance of $10,902.  About 75.7% of people with credit card debt say their interest rate is more than 15%. Millennials reported an average of $8,864 in credit card debt, and GenXers have an average debt of $12,026.