Dec 28, 2017 3 min read

Along with stuffing stockings near and far, Santa Claus delivered a gift to America’s retailers this year – sales were up almost 5 percent compared to 2016, with consumers undoubtedly nudged along by low unemployment rates and increasing confidence that the economy is on solid ground.

The mood will likely be a little less buoyant for many Americans when the cold of January settles in and the credit card bills arrive. The splurging for Christmas will add to the load of money they owe because of those thin chunks of plastic that fit so easily into our wallets and purses.

According to an annual survey of household credit card debt released in November by personal finance website NerdWallet, Americans are carting around almost $1 trillion in credit card debt – $905 billion to be exact, an 8 percent increase from 2016. NerdWallet pointed out this amount also includes consumers who pay off their credit card bills each month and don’t carry a balance forward. But the average American household has $15,654 in credit card debt, the survey found, along with debt they have for mortgages, auto and student loans.

Of course, taking on debt for an education can be a necessity in order to get a toehold in today’s economy, and a college degree can pay off in the long run with higher lifetime earnings. Owning a home is also an investmen and offers advantages at tax time. But credit card debt is a millstone, with usurious interest rates that mean consumers ultimately end up paying far more for items they put on their cards. A pile of credit card debt is also a drag on individual credit scores. That can lead to higher interest rates when it comes time to apply for other types of loans.

To be sure, some of this is due to old-fashioned profligacy. Forty-one percent of respondents to the survey said spending on unnecessary purchases led to their debt. But before we get out the ruler and start wrapping wrists, other consumers reported their credit card debt was the result of needing to use credit cards to cover medical expenses, pay for necessities while enduring a period of unemployment or pay for essentials that are not covered by household income.

In fact, NerdWallet noted income growth increased by 20 percent over the last 10 years, while medical costs have shot up by 34 percent and the price of food has increased by 22 percent. This being the case, you can understand why some people would use their credit cards in order to stay afloat.

The easiest way to lower credit card debt is to cut daily expenses, or use cash as much as possible rather than a credit card. Hauling around less credit card debt means households will be able to save more and, among other things, put their retirement on a more secure footing.

Writing for the political website The Hill, investment banker and consumer advocate Chris Markowski said, “It can be helpful to think of personal spending this way: Whatever you do not spend today, will be available for you to spend tomorrow, or more importantly, in retirement. As the great investor Warren Buffett famously said, ‘Someone is sitting in the shade today because someone planted a tree a long time ago.’ Using credit cards is cutting down tiny saplings that, left alone for years, can flourish into giant oaks that will protect you and your family.”