The answer didn’t surprise me, but it might surprise you.
Republicans and Democrats love to argue about who’s more fiscally responsible. Conservatives are “most likely to own their homes,” according to Pew Research. Liberals have “the highest credit scores,” according to LendingTree.
But what about the money they owe? Turns out a new study accidentally discovered something fascinating about that.
“Back to bad habits”
Every quarter, a company called WalletHub looks at Americans’ credit card debt. The big conclusion from April to June 2022 was this: “U.S. consumers are back to bad habits when it comes to credit card debt.”
During the worst of the pandemic, Americans slashed their credit card spending. Some experts wondered if that would last long since credit card balances aren’t just expensive but they’re also stressful. Life is just easier when you don’t owe thousands of dollars at 20 percent interest.
Well, it didn’t last long at all…
Following a record-setting reduction in 2020, consumers added a total of $86.2 billion in new credit card debt to their tab during 2021, capped off by a $73.1 billion increase during the fourth quarter alone. Now, consumers have started 2022 by paying down just $12.5 billion in Q1 and adding a staggering $67.1 billion in new debt during Q2 – a Q2 record.
Did you follow all that? If not, let me boil it down for you. With the pandemic barely in our rear-view mirror and record-setting inflation still ravaging our money, Americans are running up big balances and not paying them back.
That’s bad news. But who is it worse for? Republicans or Democrats?
Debt is bipartisan
WalletHub also broke down this credit card debt by state. Here are the four with the biggest debt increase…
- New York
California and New York are two of the most liberal states in the nation. Texas and Florida are among the most conservative. Even the two states with the “smallest debt increase” were Vermont (home of Bernie Sanders) and Wyoming (which hasn’t voted Democrat for president since 1964).
Now, let me be clear: WalletHub just published these results. They didn’t draw any conclusions. I’m doing that myself. And I have a good reason for doing that.
Debt is an American problem
I’ve spent my life working two careers that elicit judgment from a lot of people: Insurance and the Real Housewives of Orange County. The stereotypes are simplistic and wrong. Most insurance agents aren’t boring and greedy. Most Housewives reality stars aren’t self-centered and greedy.
There’s a big problem with stereotypes like these. They give you an excuse to ignore things. Hey, I don’t need insurance, that’s just a greedy agent trying to make a commission. Hey, I don’t need to consider celebrities as human beings, they’re just caricatures.
Well, the same thing happens when Democrats and Republicans consider each other as “other.” It’s bad enough in politics, but it stretches into personal finance. The fact that people in both parties have the same financial problems should drive home the point: We need to work together on the solutions.
If you have credit card balances of $10,000 or more, you have a problem. I don’t care what your salary is, you’re wasting money. The average credit card interest rate right now is around 17 percent, according to Forbes. And that’s just the average. For many, it’s 20 percent or higher. That means for every five bucks you charge; you’re forking over one dollar to your credit card company. That’s terrible math.
The bipartisan solution is to call Debt.com. I’ve partnered with Debt.com because they’ve helped millions of Americans – of all political persuasions – get out from under the personal debt that’s making their lives miserable. If you’re not happy with your money, you need to call them, too.
Published by Debt.com, LLC