Financial Literacy 2007 - Credit cards
A cartoon man in a suit looking at an uneven scale with a red credit card on the left scale and a yellow credit card on the right
credit cards
What Americans say about credit cards

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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Balance Transfer Cards 15.75%  0.02 15.77%
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