Survey: More Wealth Doesn't Mean Less Debt


Credit card debt has been a growing problem across America for years, but a new report shows it's not just an issue for those struggling to make ends meet. In fact, those in higher tax brackets are more likely to owe on credit cards. The Bankrate survey reveals that 46% of those with net worths of more than $100,000 are carrying credit card debt, compared with 40% of those with a negative net worth. In fact, among those with a net worth between $100,000 and $200,000, 57% have credit card debt---the highest of any income bracket.

The results are surprising to analysts, considering those with more wealth and assets would seem to be in a better position to purchase things without using high-interest credit cards. "There are a lot of people with six-figure net worth that are still paying hefty credit card rates, which often run in the 20 percent range," says Ted Rossman, analyst with creditcards.com.

As for why those with higher net worths are more likely to ring up credit card debt, Rossman has an explanation. "I would list three main factors---lifestyle creep, access to credit, and homeownership," he tells KTRH. "People with higher net worth are more likely to be approved for credit cards, and more likely to get higher limits. Unfortunately for a lot of those people, they're using those limits to their full extent."

Rossman recommends paying off credit card debt as quickly as possible, because of the high interest rates. Credit cards carry an average interest rate of 17-20%, much higher than other forms of debt like home mortgages, student loans or car loans. "Even if you have money in the bank, it's not smart to carry credit card debt," says Rossman.


Sponsored Content

Sponsored Content