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 .
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).
Tags: CreditCards.com
