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Americans seeing a big jump in credit card debt, financial advisor shares how to avoid it

Some credit card companies waiving fees, offering perks during COVID-19 crisis
Posted at 7:22 PM, Apr 12, 2022
and last updated 2022-04-12 19:22:44-04

(LEX 18) — New data from the federal reserve shows Americans are racking up more debt than any time over the past decade. In February, consumer debt jumped by nearly 42 billion dollars, including a more than 20% jump for revolving credit.

Experts say there are a few factors relating to the high numbers. Many Americans haven’t shifted out of the recent mindset with low-interest rates and regular chunks of money coming in from the federal government, said Jeff Sheppard, a financial advisor with the Family Wealth Group, and former UK basketball star.

In many cases, people have not adjusted their spending habits to match changes in their financial situation, which includes factors like inflation, Sheppard notes.

People, he said, often just don’t plan.

“People just live for the day, bring home what they can, and deal with the consequences as they show up and that's presenting a lot of problems right now,” he said.

To avoid falling into credit card debt, he recommends you write down a list of your expenses and a list of the money you have coming in. It’s important to sit down with someone and put together a financial plan, to ensure when you have something to pay for, you know how you will pay for it and where that money will come from.