We asked our friends over at BillShrink to share their perspective on American credit card spending habits. Because they help people save money, in part by suggesting credit cards with lower interest rates, they have access to all kinds of data such as average credit card balances and interest rates. We thought what they have to say on Americans’ spending and saving habits (coupled with their top credit card pics) is pretty interesting, and think you will too.
In the dot-com heyday of the 1990s, when credit flowed freer than the Cristal at a P. Diddy party, the personal savings rate in America sank, hitting a historic 0.9% low in October 2001.
Eight years later, our economic situation has drastically reversed, and our spending and savings habits have undergone a corresponding shift. As foreclosures mount, jobs are eliminated, and credit tightens, we Americans are spending less and saving more.
Over here at BillShrink, we’ve definitely noted an increase in financially sound behavior. Over the past nine months, the credit card debt carried by the average BillShrink user has fallen 8%, from $7,427 to $6,812. The number of BillShrink users who pay off their credit cards each month has also increased over time by about 10%, from 46.7% to 55.3%.
Give your big balance a break
Still, if you’re like me, you have a hefty outstanding card balance and the interest paid on that amount irks me every month. Put your card to the test and see if there are better credit card offers out there. Forget about loyalty: switch to a credit card with a better interest rate so you can focus on paying down the balance.
Two of my favorite cards right now are from Bank of America:
- Bank of America’s Total Merrill Cash Back, which has a 1.9% introductory APR on balance transfers for 12 months, 9.99% interest on purchases and has no annual fee. (This card will save me $2300 in interest over the next year if I continue to only pay down a few hundred dollars a month).
- Another one to lighten your load is B of A’s Accelerated Cash Rewards with a 0% introductory APR for 10 months, a 12.99% variable rate on purchases and no annual fee.
Join the trend to cut down your spending, but start by making sure you’re not paying unnecessary interest. Save your allegiance for where it really counts and maybe soon you can join that group of Americans who pay down their credit card each month!