Credit card abuse is when people use credit cards for purchases and expenditures, excessively and irresponsibly. In many cases credit cards have become a way of life. People use them for gas, groceries and many other consumer goods without thinking about the consequences.
According to Money-zine.com, people in the United States charged roughly $1,950 billion dollars in credit card debt in 2006, which equates to $11,300 in purchases for every consumer with a credit card. The projections for 2010 are even higher.
As of January 2008, the percentage of credit card accounts that were 30 days past due or more was 4.18 percent in the fourth quarter of 2007, according to the American Bankers Associated.
When people abuse their credit cards they end up seeking help from consumer credit counseling or debt management companies, or they may need to file for bankruptcy protection.
According to Money-zine.com, the number of bankruptcies in 2007, during the second quarter, was 200,732, which represents an increase of 11.6 percent above the first quarter filings of 2007.
To avoid being overtaken with credit card debt, consumers would do well to use credit cards as a matter of convenience. It helps them avoid carrying cash. When the credit card statement arrives, the entire balance should be paid in full.
- Money-zine.com: Consumer Debt Statistics
- Federal Reserve Bank of Boston. “The 2016 and 2017 Surveys of Consumer Payment Choice: Summary Results,” Page T-8. Accessed August 14, 2020.
- American Bakers Association. “CREDIT CARD MARKET MONITOR,” Page 2. Accessed August 14, 2020.
- Experian. “What is a Credit Utilization Rate?” Accessed August 14, 2020.
- MyFICO. “What's in my FICO® Scores?” Accessed August 14, 2020.
- MyFICO. “What is New Credit?” Accessed August 14, 2020.
- CNBC. “How the Chase 5/24 rule works and what it means for your Chase credit card applications.” Accessed August 14, 2020.
- Discover. “The New 5% Calendar is here.” Accessed August 14, 2020.
Melvin J. Richardson has been a freelance writer for two years with Associated Content, and writes about topics such as banking, credit and collections, goal setting, financial services, management, health and fitness. Richardson has worked for several banks and financial institutions and gained invaluable experience and knowledge. Richardson holds a Master of Business Administration in Executive Management from Ashland University in Ashland Ohio.