Credit

Credit means receiving something of value now and promising to pay for it later, often with a finance charge added by the lender. American consumers use credit to buy almost everything, including food, clothing, housing and transportation. Unfortunately, many people struggle to control their use of credit and get overwhelmed by piles of bills. If you need help battling credit problems, we have information and tools you can use to manage your credit problems and take control of your finances.

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Average Credit Card Interest Rate

14%

Average FICO Credit Score

680

Total U.S. Consumer Debt

$11.4 trillion

Credit Cards

Credit cards are a fast and convenient way to spend money, which makes them one of the easiest ways to get into debt. The average U.S. household has $7,281 in credit card debt. Those that carry a balance owe $15,609. Learn how to manage credit cards and what to do if you are in over your head

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Credit Scores & Reports

Your financial health is often expressed by one number — your credit score. Credit scores are an assessment of your credit history and how well you handle money. Lenders use them to determine interest rates, credit limits and more. Discover how to improve your credit score and steps to take that will keep it high.

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Loans & Credit

Loans and credit work hand in hand. You can’t have one without the other. Home, car, student and small business loans help establish your credit, but also are the reason so many people are in debt. Learn how to establish good credit, pay off loans faster and avoid long-term debt.

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More on Credit

How does credit affect me?

Poor credit is an albatross that penalizes nearly every aspect of your financial life. Poor credit is detailed on credit reports that provide lenders, landlords and potential employers a history of your spending and creditworthiness. Credit reports are a vital step toward approval for credit cards, mortgages, auto loans or even getting your utility service turned on. Successfully managing the information in a credit report increases your ability to receive lines of credit, making it easier to deal with the financial challenges in life.

Types of Credit

There are two basic types of credit: secured and unsecured. Secured credit is a loan backed by an asset or collateral, such as a property, home, automobile or boat. Unsecured credit has no assets or collateral standing behind it. Credit cards, medical bills and student loans are examples of unsecured credit.

Fast Fact

Although the concept of credit dates back thousands of years – to the merchant classes of late Renaissance Italy – the modern credit card first appeared in the United States in the 1920s. By 2014, there were 603.2 million U.S. credit cards in circulation.

Credit card debt affects millions of Americans' paychecks ever year. Here is how it effects the U.S. as a whole.

Bill Fay

Author

Bill Fay

Staff Writer

Bill Fay is a journalism veteran with a nearly four-decade career in reporting and writing for daily newspapers, magazines and public officials. His focus at Debt.org is on frugal living, veterans' finances, retirement and tax advice. Bill can be reached at bfay@debt.org.

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