$30k is a perfectly manageable debt for most people with most jobs and living situations.
If you only make the minimum payment each month, it will take about 460 months, or about 38 years, to pay off that $30,000 balance. And, you'll pay a staggering $54,359.80 in interest charges along the way, which means the interest you pay will be well above the original principal balance you started with.
You can have too much debt if your overall balance exceeds 30% of your credit limit. According to some experts, credit usage should be kept between 1% and 10%, whereas anything between 11% and 30% is often seen as good.
Running up $50,000 in credit card debt is not impossible. About two million Americans do it every year. Paying off that bill?
$25,000 felt like an impossible amount of debt
High interest. Carrying over balances with an average of about 19.24% can make paying off debt challenging.
High-interest credit card debt can devastate even the most thought-out financial plan. U.S. consumers carry $6,501 in credit card debt on average, according to Experian data, but if your balance is much higher—say, $20,000 or beyond—you may feel hopeless.
But ideally you should never spend more than 10% of your take-home pay towards credit card debt. So, for example, if you take home $2,500 a month, you should never pay more than $250 a month towards your credit card bills.
It's a good idea to pay off your credit card balance in full whenever you're able. Carrying a monthly credit card balance can cost you in interest and increase your credit utilization rate, which is one factor used to calculate your credit scores.
The Cash advance limit is a portion of the overall Credit limit, ranging from 20% to 40%. For instance, if your Credit limit is Rs 1,00,000 then you can withdraw between Rs 20,000 to Rs 40,000 as cash. The remaining balance can be used for Card transactions only.
Credit Card Debt Ages 30 to 39
Some of these changes will impact your overall debt by age, but consider just your debt related to using your plastic. Your evolving lifestyle can cost you. The average credit card debt for those in their 30s is $4,110, significantly more than the $1,462 owed by people ages 18 to 29.
It will take 41 months to pay off $30,000 with payments of $1,000 per month, assuming the average credit card APR of around 18%. The time it takes to repay a balance depends on how often you make payments, how big your payments are and what the interest rate charged by the lender is.
U.S. households average about $6,100 in credit card debt, as inflation and high APRs strain finances. Oct. 8, 2024, at 10:05 a.m.
Prioritise paying off your highest interest debts first.
Martin said: "If you've got lots of debts, list them with the highest APR first. Put all your spare cash towards getting rid of that highest interest rate and pay minimum payments on the others. Don't pay off the big one, pay off the highest interest one."
If you're talking about credit card debt, all you need to do is make minimum monthly payments. At a minimum payment of $200 a month at current interest rates, it will end up costing you $22,644.95 (in addition to the original $20,000!) to pay off all the debt, and it'll take you about 10 years to do it.
Though there isn't a one-size-fits-all answer regarding how much debt you should have, there are a few factors to consider. For example, a general rule of thumb is if roughly half of your monthly income is committed to debt payments, there's a good chance you have too much debt.
Most credit card companies won't provide forgiveness for all of your credit card debt. But they will occasionally accept a smaller amount to settle the balance due and forgive the rest. Or the credit card company might write off your debt. But this step doesn't eliminate the debt—it's often sold to a collector.
Here's the average debt balances by age group: Gen Z (ages 18 to 23): $9,593. Millennials (ages 24 to 39): $78,396. Gen X (ages 40 to 55): $135,841.
There isn't a specific amount of credit card debt that's considered too much. Instead, it depends on your individual financial situation and how you're using your credit cards. U.S. consumers had an average total credit card balance of $6,501 as of the third quarter (Q3) of 2023, a 10% increase from the previous year.
There are some differences around how the various data elements on a credit report factor into the score calculations. Although credit scoring models vary, generally, credit scores from 660 to 724 are considered good; 725 to 759 are considered very good; and 760 and up are considered excellent.