One-fifth of Americans have no idea if they have credit card debt

Americans need a credit check.

A survey of more than 1,000 adults released this month from US News and World Report reveals that Americans are extremely unaware of their credit card situation. Indeed, when asked “do you have credit card debt?” fully 21 percent answered “I don’t know,” the survey reveals.

How can this be? “Unfortunately, the reality is they are often choosing not to know … in most cases it is denial,” explains certified financial planner Bobbi Rebell, host of the Financial Grownup podcast and co-host of the Money with Friends. “A person who in their gut knows something they eat is high in calories will choose to not look at the number — because if they do they might not get the treat. In our gut we all [who have credit card debt] have at least a sense that we spent more money than we paid back.”

Certified financial planner Kimberly Foss, founder of Empyrion Wealth Management, notes that the “this isn’t that surprising, given the ease with which credit cards can be acquired online.” And Rebell adds that a lack of personal finance education may also play a role. Only five states currently require high-school students to take a personal-finance class, as MarketWatch explored this year.

Whatever the reasons, this comes as credit card debt hits new records: Indeed, by the end of 2018, US credit card debt had hit $870 billion — the highest amount ever, according to the Federal Reserve. What’s more, we now have more than 480 million credit cards, which is up by more than 100 million since the recession.

Even people who know they have debt often don’t know what interest rate they’re paying. A CreditCards.com survey of more than 2,000 consumers revealed that nearly half of cardholders who carried a balance were either unsure or unaware of their card’s APR.

This knowledge gap is fixable, experts say. “The way to fix this issue is to dive headfirst into your finances. Get online and look at the account details for your credit cards,” says Beverly Harzog, credit card expert at US News and World Report.

Should you discover you do have debt, create a plan for paying it off: One simple rule, slash your lifestyle expenses to free up money and then pay as much as you can on the highest interest card each month, the minimums on all others and do this until all your debt is repaid. Harzog adds that you may also want to consider a balance transfer. Here’s what to think about if you’re pondering one.

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