We are constantly researching economic conditions to find information that could be valuable for you. Being an Informed Lender means being committed to thoroughly educating our clients.

The topic of consumer credit card debt is becoming a statistic worth understanding. Here are a few bullet points to be aware of:  

  • Americans’ total credit card debt has surpassed $1.0 Trillion for the first time in history
  •  This type of debt is up nearly 12% from 2022
  •  The typical American household now carries around $10,000 in credit card debt and is expected to grow further
  • The average credit card interest rate is 20% (around 14% in 2021).
    •  The current Prime Rate is 8.500% (3.250% in 2021). This is the rate the Fed controls. When you hear that “the Fed raised rates,” they are referencing this, NOT mortgage rates. The Prime Rate directly affects credit card rates.

Here is a link to a good article on the topic: Americans’ Credit Card Hits a Record $1 Trillion.

A mortgage or line of credit against your property can be a brilliant way to manage this type of debt. These resources allow you to consolidate debt into one loan. A few points to understand:

  • Fixed Mortgage and HELOC (home equity line of credit) rates are significantly lower than credit card rates. Mortgage rates are hovering in the 7.00% range.
  •  HELOC rates and Fixed Second Mortgages are in the 8.000 – 11.000% range
  •  Multiple bills become a single payment.
  •  Since it is home interest, it can be tax-deductible.

The amount of equity created via home appreciation in the last few years is the most in history. This puts many homeowners in a position to borrow more without risking owing more than would be “safe” compared to the equity. 

Please reach out to us if you have any questions or would like to have a complete debt analysis done to determine if a debt restructuring is the best strategy. 

Thank you, as always, for your trust in us.