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NEW YORK – Households with credit card debt are outspending debt-free households in seven of nine discretionary spending categories, according to a new CreditCards.com report.
Here are the average annual expenses for each household*:
|
Category |
Debtors |
Non-Debtors |
|
Car Loan/Lease |
$5,096 |
$5,262 |
|
Leisure Travel |
$2,211 |
$3,188 |
|
Dining/Takeout |
$2,186 |
$2,023 |
|
Clothing, Shoes and Accessories |
$1,892 |
$1,515 |
|
Cell Phone Services/Upgrades |
$1,629 |
$1,326 |
|
Out-of-Home Entertainment |
$1,538 |
$1,232 |
|
Fitness |
$1,385 |
$1,317 |
|
Subscription Services |
$1,198 |
$1,083 |
|
Personal Care/Beauty |
$1,146 |
$945 |
In all nine categories, a minority of respondents would be willing to cut their spending by 50% in order to save money. Debtors are only slightly more likely to cut back than non-debtors:
|
Category |
Debtors |
Non-Debtors |
|
Car Loan/Lease |
26% |
22% |
|
Leisure Travel |
30% |
26% |
|
Dining/Takeout |
48% |
44% |
|
Clothing, Shoes and Accessories |
35% |
31% |
|
Cell Phone Services/Upgrades |
25% |
19% |
|
Out-of-Home Entertainment |
36% |
33% |
|
Fitness |
28% |
18% |
|
Subscription Services |
39% |
32% |
|
Personal Care/Beauty |
23% |
20% |
Nearly 1 in 5 (18%) Americans with credit card debt are unwilling to cut back in any of these discretionary spending categories.
“The average U.S. household spends thousands of dollars a year on non-essentials. If you’re charging these luxuries and carrying a balance, you’re spending an average of about 18% more for the privilege,” said Ted Rossman, industry analyst at CreditCards.com. “Would you have chosen the same car, plane ticket or restaurant if the price were 18% higher?”
According to the American Bankers Association, about 60% of credit cardholders carry balances from month to month. The Federal Reserve says the average household with credit card debt owes $5,700.
“For those in debt, I recommend balance transfer credit cards and looking for ways to boost your income and cut your expenses,” Rossman adds. “It’s not necessarily about going without – it’s about being an educated consumer and spending less on things you’ll still enjoy. Cutting a monthly expense is especially valuable because it comes up again and again.”
* Each category includes all households that spend in that area at least once a month (at least once a year for leisure travel)
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