An awful lot of Americans feel lousy about the way they’re handling credit card debt, say the results of a Bankrate commissioned survey.

Twenty-five percent worry about how they are going to pay their credit card bills each month and 28 percent feel guilty about how much money they are putting on their cards.

Do you worry about how you’ll pay credit card bills every month?

Source: Bankrate.com 2007

“There’s an awful lot of emotion involved when it comes to credit card debt,” says Robert Manning, director of the Center for Consumer Financial Services at the Rochester Institute of Technology, “and, a lot of it is negative.

Do you sometimes feel guilty about how much money you put on your cards each month?

Source: Bankrate.com 2007

“If the poll had only surveyed people who carry a balance on their credit cards, I’m positive you’d find that those percentages would be much higher,” he says.

Susan Keating, president and CEO of the National Foundation for Credit Counseling goes one step further. After looking over the Bankrate poll results, Keating wonders whether Americans are being honest with themselves. “As the old saying goes, ‘the first and most important step is admitting you have a problem’ and it seems like when it comes to debt consumers are still living in denial.”

Doing OK with credit cards

But there were some bright spots in our survey of 1,014 adults conducted for Bankrate by GfK, Roper Public Affairs and Media. Eight out of 10 people surveyed said they have not reached the credit limit on any of their credit cards. And, more than half of the people with credit cards say they pay their balances in full each month.

Interestingly, about the same number of people who said they didn’t feel guilty or worry about credit card debt, also said they try to follow a strict budget each month (76 percent). Coincidence? Probably not, says Greg McBride, senior financial analyst at Bankrate.com.

Do you follow a strict monthly budget?

Source: Bankrate.com 2007

People who pay attention to their budgets are less likely to make impulsive credit card purchases. They know to avoid that buy-now, pay-later thinking that credit cards can sometimes cause.

“Sticking to a budget is the best thing you can do to control credit card debt,” says Manning.

Americans like their plastic

A third of the people surveyed said they had three or more credit cards and a whopping 23 percent have four or more with nearly 10 percent of those acknowledging they had more than five credit cards. Seventeen percent said they had only one card and the same number of people carry two credit cards. A good chunk of people say they have no credit cards at all (31 percent).

How many cards do you have?

Source: Bankrate.com 2007

Too many cards can be a problem if you don’t use them properly, says Jean Chatzky, personal finance expert and author of “Make Money, Not Excuses.” “You might be tempted to charge on all of them, and go over what you can really afford,” she says.

Our survey showed the likelihood of having a credit card correlates with income. Forty-seven percent of respondents with a household income of $50,000 or more have at least three credit cards. Consumers with tighter budgets are different. More than 60 percent of respondents with a household income of less than $20,000 don’t have any credit cards. “That makes sense when you think about it,” says Manning. “But these days even people with higher incomes can’t afford the kind of credit card debt they’re carrying.”

Our payment habits

While 55 percent of people surveyed said they pay off their credit card balances each month, another 9 percent say they make only the minimum payment and, scarily, 3 percent say they sometimes cannot make the minimum.

 
How do you pay your cards?

Source: Bankrate.com 2007

That means that close to half of Americans are paying interest to the credit card companies and may be making purchases that they can’t always afford, says Manning. “Carrying a balance means you’re tied to paying your credit card debt instead of other, much more important financial goals like saving for retirement or having a bit set aside for emergencies,” he adds.

Late payments reverberate

When it comes to late payments, a third of the people polled said they have missed one or two due dates and 6 percent have missed several due dates. “Those are disturbing numbers considering the punitive interest rate of 30 percent or more that can kick in if you make a late payment,” points out McBride.

Credit card companies routinely charge high late payment fees. One or two late payments and you can expect to see a hike in your interest rate almost immediately.

How often over the past two years did you miss a credit card due date?

Source: Bankrate.com 2007

And thanks to something known as universal default, if you make a late payment on one credit card and it’s recorded in your credit report, your other card companies may raise your rates as well.

According to the Government Accountability Office, late fees averaged $13 in 1995. They soared 169 percent to an average of $35 in 2005.

How’s that for motivation?

This national random-digit-dialed phone study of 1,014 adults 18 or older was conducted for Bankrate by GfK Roper Public Affairs & Media. The surveys were conducted from Jan. 26 through Jan. 28, 2007. The sample was weighted by demographic factors including age, gender, race, education and census region to ensure reliable and accurate representation of adults in U.S. households. Results based on the entire sample of 1,014 adults are projectable to the entire adult population in the United States, with a sampling error of plus or minus 3 percentage points.

Do you have a secret to success with credit cards? Or, are you struggling? Share your story.

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