Credit cards: once a rarity, now a fixture of American commerce and increasingly the go-to payment method for goods and services. They can be a blessing or a curse. While providing easy access to funds and greater flexibility in spending, they tend to have terrible interest charges and can saddle users with debt before they know it.
AGamble.com, a guide to gambling sites, surveyed over 800 Americans with credit cards about their credit usage as well as other risky financial moves and found that Americans are spending a little unwisely, especially when it comes to credit cards.
Financial Health and Risk
In turbulent economic times, one of the most popular pieces of advice is to have a spending budget, yet 1 in 3 Americans don’t. A further 28% say they overspend with their credit cards, and 1 in 6 don’t even review their monthly credit statement. While nearly half(45%) claim that credit cards incentivize them to live beyond their means, 4 in 5 still maintain that they practice healthy financial habits today.
This might be because nearly 1 in 2 were taught financial wellness by their parents growing up, even if nearly 3 in 4 never received the same education in primary school.
However, that doesn’t mean the American people are opposed to risk-taking, however. Over 1 in 5 use “Buy Now, Pay Later” programs like Klarna while making purchases with a credit card. Gen Z likes this option the most with more than 30% using it for purchases.
1 in 10 have taken out a payday loan, a short-term, high-interest loan that will front part of your paycheck if need be. 2 in 5 felt lucky and invested in cryptocurrency. Unsurprisingly, Millennials are leading the charge in crypto: 1 in 2 Millennials have invested in cryptocurrency of some sort.
Top Credit Card Uses & Habits
Credit cards are POPULAR. Of those with credit cards, 1 in 3 Americans have at least 4 different cards. While bank-issued cards are the most popular (64%), other popular card types include cash-back cards, retail credit cards (for example, the Target RedCard), credit union-issued credit cards, and bank-issued travel rewards cards.
1 in 5 Americans makes all their purchases using a credit card. Generally, 51% of Americans prefer paying in credit, followed by 43% preferring debit payment, and only 6% prefer paying in cash. Credit cards are so ubiquitous that more than 1 in 10 don’t know how to navigate daily living without a credit card!
There is a price, however, to this flexibility: fees and bills. Americans boast an average annual card fee of $178 and a monthly credit bill of around $909. Bills can be surprising: over 1 in 10 are surprised by their credit bills every month, and the younger generation especially can be surprised, over 1 in 5 in Gen Z are surprised by their bills. It can be easy as nearly 1 in 3 Americans have forgotten about recurring subscriptions on their credit cards.
While over 3 in 5 Americans do pay off their credit card monthly, over 1 in 3 do carry debt over from month to month. For some, it’s worth it. Americans are willing to take on debt to fund a major purchase like a computer or appliance, car repairs, medical expenses, a vacation, or home repair. Some are inclined to take on debt for more frivolous things as well. 1 in 5 would incur credit debt for a night out, and over 1 in 6 would take on debt for a concert ticket!
Top Credit Debt Causes
Credit debt is never fun, and it’s easy enough to find yourself in debt. Over 2 in 5 Americans have maxed out a credit card, and 68% have had credit debt at some point. Right now, 41% of Americans currently have credit card debt, with 1 in 2 Boomers currently with credit debt.
Of those with credit card debt, they hold an average of $7,843 in debt and have had it for about three years. Top causes for credit debt include large, necessary purchases– causing nearly 1 in 2 to go into debt– as well as poor budgeting (27%), inflation (25%), no savings (24%), and auto expenses. Both underemployment and lost jobs are also among the top reasons Americans incur credit card debt.
What are Americans doing about their credit debt? One clear answer is stressing about it, with 2 in 3 saying their debt causes stress. For the more blasé, 1 in 5 have no current plan to address credit debt, and over 1 in 2 are not concerned about the implications their debt has on their credit score!
Use of Rewards Cards and Impact of Credit Score
Rewards cards are everywhere: 80% report having a credit card with rewards points. Most seem to think these cards are worth it – with 78% saying the points are a good value. Over 1 in 2 use rewards points for cash back on their credit statement, while 45% prefer cash back to their bank accounts; others use rewards points for travel or products.
While relatively new– created in the late 1980s– credit scores have quickly become one of the main signifiers of financial health. Yet, over 1 in 10 Americans don’t know their credit score. Of those who do and want to raise it– 2 in 3 Americans have tried to improve their credit score. Half have done so by paying down debt, and 30% pay their credit bills more frequently. 29% have tried to use their cards less, 28% have paid off loans, and 14% have gotten a secured credit card to build their credit back up. Probably a smart move: 19% have been denied a loan due to their low credit score.
While credit cards make life easier, without proper planning and careful expense tracking, they can become as much of a gamble as high-risk investments or cryptocurrency. As the economy continues to amass storm clouds, here’s hoping Americans have a clear plan in sight.
Research Methodology
In May 2023, we surveyed 803 Americans about their credit card use, debt, and overall financial behaviors. Respondents were 49% male, 49% female, and 2% non-binary. Respondents ranged in age from 18 to 85 with an average age of 42 years old.
Fair Use
When using this data and research, please attribute by linking to this study and citing agamble.com
Gambling with Credit Cards in the USA: Convenience, Risks, and Regulations
Online gambling in the United States has a complex and varied legal history, with laws and regulations varying greatly from state to state. As of today, online gambling is fully legal and regulated in a handful of states, including New Jersey, Pennsylvania, Michigan, West Virginia, Connecticut, Rhode Island and Delaware. In these states, it is legal to use a credit card for online gambling. However, in most other states like New York, Indiana, Illinois and Iowa, online gambling is either completely illegal or partly allowed (sports betting).
Using a credit card for online casino gambling can carry inherent risks. One of the primary concerns is the potential for financial harm. Gambling can be addictive, and the ease of use and access provided by credit cards can exacerbate problem gambling behaviors. It’s very easy for a person to lose track of how much they’re spending when it’s just a matter of clicking a button.
Furthermore, interest rates on credit cards can be high, especially when users fail to pay off the balance in full each month. Thus, any gambling losses can be compounded by high interest rates, leading to a cycle of debt that can be difficult to escape. Additionally, some credit card companies treat gambling transactions as cash advances, which often carry even higher interest rates and additional fees.
In terms of personal data and online security, using a credit card to gamble online can also expose individuals to potential fraud or theft. This is particularly true on less reputable sites that may not have stringent security measures in place.
Even though there are risks, some people find that using a credit card for online gambling offers convenience and ease of use, and it can also provide a record of transactions for tracking spending. It’s important for each individual to understand the potential risks and to make decisions about online gambling and credit card use based on their own personal circumstances, financial stability, and comfort with risk. Always remember that gambling should be seen as a form of entertainment, not a way to make money, and it’s important to only wager amounts that you’re comfortable losing.
