Are Subprime Mortgages Worth the Risks?

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What Are Subprime Mortgages and What Are Their Risks?

Subprime mortgages allow borrowers with lower credit scores to obtain homeownership, but the homebuyers pay a steep price for the privilege, thanks to the higher risk to lenders. Fortunately, there is hope for subprime borrowers who raise their credit profiles through consistent, on-time payments: They can look into refinancing. Here’s a closer look at the subprime mortgage world.

What Is a Subprime Mortgage?

A subprime mortgage is a housing loan made to a borrower with a subprime credit score, typically one in the 580 to 669 range, although what constitutes a prime and subprime credit score can vary among lenders and organizations. A credit score above 670 is considered prime, according to Experian, which tracks data on the credit industry. (And generally speaking, to qualify for the best interest rates, a borrower needs a “super prime” score of 740 or better.)

Borrowers with lower credit scores represent a greater risk to the lender; they are statistically more likely to have trouble paying on time. So subprime mortgages often come with higher interest rates and larger down payments to help protect the lender from the increased risk of default.

Subprime borrowers accept these terms because they cannot qualify for a conventional mortgage — one from a private lender like a bank, credit union, or mortgage company — with lower costs. Subprime mortgages are different from government-backed loans for borrowers with low credit scores (such as FHA loans backed by the Federal Housing Administration).

How Subprime Mortgages Work

The main difference between a mortgage loan offered to a prime borrower vs. a subprime borrower is cost. Borrowers go through the same rigorous underwriting process with a lender and must submit documentation to verify income, employment, and assets.

But in the end, a prime borrower is offered the best rates, while a subprime borrower with so-called bad credit has to put more money down, pay more in fees, and pay a much higher interest rate over the life of the loan. Subprime mortgages also are often adjustable-rate mortgages, which means the payment can go up based on market indices after a predetermined period of time.

Subprime Mortgages and the 2008 Housing Market Crash

Subprime mortgages became popular in the 2000s as more high-risk mortgages were made available to subprime borrowers. In 2005, subprime mortgages accounted for 20% of all new mortgage loans.

It became possible for a lender to originate more of these high-risk mortgages because of a new financial product called private-label mortgage-backed securities, sold to investors to fund the mortgages. The investments masked the risk of the subprime mortgages within.

Home prices soared as more borrowers sought out the various subprime mortgages being offered. Rising home prices also protected the investors of mortgage-backed securities from losses.

When the housing market had passed its peak and borrowers had no viable option for selling or refinancing their homes, properties began to fall into default. In an attempt to reduce their risk exposure, lenders originated fewer loans and increased requirements for all borrowers. This depressed the market further.

Financial institutions that had taken strong positions in mortgage-backed securities were also in trouble. Many of the largest banking institutions in the world filed for bankruptcy, and the world learned once again what stock market crashes are.

In response to the financial crisis, the Federal Reserve implemented low mortgage rates in an attempt to jumpstart the economy.

Subprime Mortgage Regulations

In the wake of the financial crisis, Congress passed the Dodd-Frank Act to reduce excessive risk-taking in the mortgage industry. It established rules for what qualified mortgages are, which gave lenders a set of rules to follow to ensure that borrowers had the ability to repay the loans they were applying for.

It also provided regulation of qualified mortgages, including:

  •  Limiting mortgages to 30-year terms
  •  Limiting the amount of debt a borrower can take on to 43%
  •  Barring interest-only payments
  •  Barring negative amortization
  •  Barring balloon payments
  • Putting a cap on fees and points a borrower can be charged for a loan

Subprime mortgages are not qualified mortgages. Borrowers who seek non-qualified mortgage loans may include self-employed people who want a more flexible financial verification process, people who have high debt, and people who want an interest-only loan.

Types of Subprime Mortgages

The most common types of subprime mortgages are adjustable-rate mortgages (ARMs), extended-term mortgages, and interest-only mortgages.

  •  ARMs. Adjustable-rate mortgages have an interest rate that will change over the life of the loan. They often come with a low introductory rate, which after a predetermined time period changes to a rate tied to market indices.
  • Extended-term mortgages. A subprime mortgage may have a term of 40 years instead of the typical 30-year term. Add to this the higher interest rate, and borrowers pay much more for the mortgage over the life of the loan.
  •   Interest-only mortgages. Interest-only loans offer borrowers the ability to only repay the interest part of the loan for the first part of the repayment period. Borrowers have the option of not repaying any principal for five to 10 years. The annual percentage rate is typically higher than for conventional loans. Origination fees may be higher as well.

The “dignity mortgage,” a new kind of subprime loan, could help borrowers who expect to redeem their creditworthiness. The borrower makes a down payment of about 10% and agrees to pay a higher rate of interest for a number of years, typically five. After that period of on-time payments, the amount paid toward interest goes toward reducing the mortgage balance, and the rate is lowered to the prime rate.

Subprime vs Prime Mortgages

Subprime mortgages have many of the same features as prime mortgages, but there are some key differences.

Subprime vs Prime Mortgages

Applying for Subprime Mortgages

Most lenders require a minimum credit score of 620 for a conventional mortgage, but there are lenders out there that specialize in subprime mortgages.

Generally, applying for a subprime mortgage is much the same as applying for a traditional mortgage. Lenders will check your credit and analyze your finances. They will ask for proof of income, verification of employment, and documentation of assets (such as bank statements). They may also ask for documentation regarding your debts or negative items in your credit reports.

Mortgage rates for subprime loans will vary depending on the prime rate, lending institution, the home’s location, the loan amount, the down payment, credit score, the interest rate type, the loan term, and loan type. The rate is typically much higher than a prime mortgage’s.

mortgage calculator can help you find out what your monthly payments will be with a subprime mortgage. Simply adjust your mortgage rate to the one quoted by a lender for your credit situation.

Alternatives to Subprime Mortgages

Subprime loans are not the only option for borrowers with fair credit scores. Borrowers with credit issues can also look at mortgages backed by the FHA and the Department of Veterans Affairs (VA).

FHA loans have more flexible standards for borrowers than conventional loans. Though borrowers can obtain a mortgage with a credit score as low as 500 (assuming they have a 10% down payment), FHA loans are not considered subprime mortgages. Instead, FHA loans are government-backed loans that provide mortgage insurance to FHA-approved lenders to use if the borrower defaults on the loan.

For many borrowers with good credit and a moderate down payment, FHA loans are more expensive and don’t make sense. However, for borrowers with lower credit scores and smaller down payments, an FHA loan could be the best option.

VA loans have no minimum credit requirement, but instead, lenders review the entire loan profile. The VA advises lenders to consider credit satisfactory if 12 months of payments have been made after the last derogatory credit item (in cases not involving bankruptcy).

(Learn more: Personal Loan Calculator

The Takeaway

Subprime mortgages allow borrowers with impaired credit to unlock the door to a home, but to mitigate risk, the lender may charge more for the loan. Borrowers considering this type of mortgage would be smart to look closely at terms and costs, and to also consider other options such as FHA loans.


This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.

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Is Your Credit Card Processing Fee Higher Than What The Average American Pays?

Is your credit card debt higher than average for your state?

Millions of Americans continue to struggle with credit card debt. The average credit card debt in America is $6,039 as of August 2023, according to a new report from TransUnion®.

Out of the 50 states, Alaska has the highest average credit card debt ($7,248), while Wisconsin has the lowest average ($4,853), data show.

More than 6 million cardholders are at least 30 days past due on a minimum payment, according to TransUnion’s credit card delinquency data.

Your credit card balance is your credit card debt. Making transactions on your credit card is a liability that eventually needs to be repaid. Below we highlight the average credit card debt in all 50 states and explain why making minimum payments each billing cycle may not be right for you.

Consumer credit card debt in the United States exceeds $1 trillion as of the second quarter (Q2) of 2023, according to the Federal Reserve Bank of New York.

The average American credit card debt increased to $6,039 in August 2023 (it was $5,982 in July 2023 and $5,416 in August 2022), according to TransUnion, a nationwide credit bureau.

Credit card debt can be costly if you’re paying interest charges. The average interest rate on credit cards is 22.16% as of Q2 2023, according to Federal Reserve data on credit card accounts assessed interest.

Atstock Productions/istockphoto

Consumer credit card debt in the United States exceeds $1 trillion as of the second quarter (Q2) of 2023, according to the Federal Reserve Bank of New York.

The average American credit card debt increased to $6,039 in August 2023 (it was $5,982 in July 2023 and $5,416 in August 2022), according to TransUnion, a nationwide credit bureau.

Credit card debt can be costly if you’re paying interest charges. The average interest rate on credit cards is 22.16% as of Q2 2023, according to Federal Reserve data on credit card accounts assessed interest.

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TransUnion publishes U.S. credit card debt data every month in all 50 states and the District of Columbia. We’re tracking the data as it becomes available and then ranking the average credit card debt by state in descending order using TransUnion’s recent industry snapshot (August 2023):

District of Columbia

The nation’s capital is not a state, but the District of Columbia has one of the highest average credit card debt balances in the United States. The average credit card debt in Washington, D.C., stands at $7,070 per consumer as of August.

(Learn more atPersonal Loan Calculator

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Alaska is the largest state in the country in terms of its geographical boundaries (586,412 square miles). It also leads all 50 states with the highest average credit card debt in the nation. Cardholders in Alaska have an average credit card balance of $7,248 as of August.

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Maryland sits south of the Mason-Dixon line. This Old Line State has a relatively high credit card debt in the USA. The average credit card debt in Maryland stands at $6,783 per consumer as of August.

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Nevada may have some issues with gambling debt. This predominantly desert and semiarid state also ranks high in credit card debt. The average credit card debt in Nevada is $6,619 per consumer as of August.

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New Jersey is the most densely populated state in the United States. The Garden State also has a high average credit card debt. Cardholders in New Jersey have an average credit card balance of $6,565 as of August.

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Hawaii sports tropical climate and active volcanoes. This state of islands in the Pacific is also known for its relatively high average credit card debt. Consumers in the Aloha State have an average credit card balance of $6,547 as of August.

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Virginia enjoys close proximity to the nation’s capital in a region locally nicknamed DMV (District of Columbia, Maryland, and Virginia). Similar to Maryland and Washington, D.C., consumers in the Old Dominion state carry a relatively high average credit card debt in America. Virginia’s average credit card debt stands at $6,535 per consumer as of August.

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Nicknamed the Constitution State, Connecticut has the highest average credit card debt in New England. What is the average credit card debt in Connecticut? It’s $6,499 per consumer as of August.

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Texas is one of the largest states in the nation in terms of its geographical boundaries and population. The Lone Star State also has a relatively high average credit card debt in the U.S. The average credit card debt in Texas is $6,499 per consumer as of August.

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Colorado hosts a large stretch of the Rocky Mountains. The Centennial State also hosts a large amount of credit card debt per consumer. The average credit card debt in Colorado is $6,425 per cardholder as of August.

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Florida is one of the largest states in the nation in terms of population and economic activity. The Sunshine State has more than 22 million residents and a gross domestic product (GDP) of nearly $1.4 trillion as of 2022. The average credit card debt in Florida is $6,423 per consumer as of August.

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California is the most populous state in the nation with more than 38.9 million people as of Jan. 1, 2023. The Golden State also has one of the highest amounts of credit card debt per consumer. The average credit card debt in California is $6,418 per cardholder as of August.

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Georgia produces tons of agricultural goods, but the Peach State also has a relatively high level of credit card debt. The average credit card debt in Georgia is $6,357 per consumer as of August.

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Washington state borders the Canadian province of British Columbia and carries a relatively high amount of credit card debt per consumer. The average credit card debt in Washington is $6,317 per cardholder as of August.

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New York remains one of the largest states in the nation despite its recent decline in population. The average credit card debt in New York is $6,313 per consumer as of August.

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Arizona welcomes domestic and international tourism with its Grand Canyon natural landmark and desert climate. The average credit card debt in Arizona is $6,129 per consumer as of August.

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Wyoming has the smallest population in the nation (fewer than 600,000 people). But this Mountain West state has a relatively high amount of credit card debt per consumer. The average credit card debt in Wyoming is $6,081 per cardholder as of August.

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Delaware is a relatively small state in terms of its geographical boundaries and population. The First State, however, is one of the bigger states in terms of average credit card debt. The average credit card debt in Delaware is $6,046 per consumer as of August.

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Massachusetts rests in the heart of New England. The Bay State also has a relatively high amount of credit card debt per consumer. The average credit card debt in Massachusetts is $6,021 per cardholder as of August.

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Illinois enjoys its reputation as the Land of Lincoln. This Midwestern state also has a relatively high amount of credit card debt per consumer. The average credit card debt in Illinois is $6,015 per cardholder as of August.

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Utah has the Great Salt Lake and a smaller average credit card debt than most of the states it borders. The average credit card debt in Utah is $5,957 per consumer as of August.

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Oklahoma is located in the middle of the 48 contiguous states. The Sooner State is also near the middle of the pack regarding average credit card debt in America. The average credit card debt in Oklahoma is $5,920 per consumer as of August.

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Rhode Island is the smallest state in the country in terms of its geographical area (1,214 square miles). The average credit card debt in Rhode Island is $5,903 per consumer as of August.

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New Hampshire represents one of the smaller states but has a high amount of credit card debt per consumer. The average credit card balance in New Hampshire is $5,875 per cardholder as of August.

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South Carolina is known for its coastline and beaches. The Palmetto State shares a border with Georgia but has a much smaller scale of credit card debt on average. The average credit card debt in South Carolina is $5,839 per consumer as of August.

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Oregon carries a lower level of credit card debt per consumer than most of the states it borders. The average credit card debt in Oregon is $5,831 per cardholder as of August.

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North Carolina is known for its colleges, universities, and military bases, among other things. (The Tar Heel State has several state-based student loan forgiveness programs.) The average credit card debt in North Carolina is $5,779 per consumer as of August.

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Louisiana sits along the Gulf Coast in the South. The Pelican State is also known as the Creole State and the Sugar State. The average credit card debt in Louisiana is $5,721 per consumer as of August.

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Nicknamed the Keystone State, Pennsylvania has a lower amount of credit card debt per consumer compared with its Mid-Atlantic neighbors of New York and New Jersey. The average credit card debt in Pennsylvania is $5,638 per cardholder as of August.

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Well-known for its country music scene, Tennessee has a lower credit card debt per consumer than most of the 50 states. The average credit card balance in Tennessee is $5,596 per cardholder as of August.

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Idaho is nicknamed the Gem State and is known for its potatoes. Average credit card debt per consumer in Idaho is one of the lowest in the Mountain West region. The average credit card balance in Idaho is $5,586 per cardholder as of August.

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New Mexico has a lower credit card debt per consumer than each of the neighboring states surrounding it. The average credit card debt in New Mexico is $5,548 per cardholder as of August.

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Missouri is not just any state — it’s the Show Me State. The average credit card debt in Missouri is $5,521 per consumer as of August.

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Alabama enjoys a coastline along the Gulf Coast. Known as the Cotton State, Alabama is also known for peanuts. The average credit card debt in Alabama is $5,520 per consumer as of August.

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Minnesota became the North Star State because of its geographical location in the country’s heartland. The average credit card debt in Minnesota is $5,507 per consumer as of August.

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Montana is known as America’s Treasure State and Big Sky Country. Montana also has the lowest average credit card debt in the Mountain West region. The average credit card balance in Montana hovers at $5,501 per cardholder as of August.

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North Dakota has multiple nicknames, including the Flickertail State, Sioux State, and the Peace Garden State. The average credit card debt in North Dakota is $5,465 per consumer as of August.

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Kansas markets itself as the Sunflower State. The average credit card balance in Kansas is $5,415 per consumer as of August.

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Maine has relatively low credit card debt per consumer compared with other New England states. The Pine Tree State also has among the lowest credit card debt per consumer along the East Coast. The average credit card balance in Maine is $5,387 per cardholder as of August.

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Mississippi is one of the poorest states in the nation, but the cost of living in the Magnolia State is also among the lowest nationwide. The average credit card debt in Mississippi is $5,373 per consumer as of August.

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Vermont is known as the Green Mountain State. The average credit card debt in Vermont is $5,362 per consumer as of August.

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Nebraska produces 81.6% of the nation’s great northern beans as of 2022, according to federal data. The average credit card debt balance in Nebraska is $5,356 per consumer as of August.

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Michigan hosts several manufacturers of popular car makes and models. It’s also known as the Wolverine State and the Great Lake State. The average credit card debt in Michigan is $5,344 per consumer as of August.

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Arkansas — dubbed the Natural State because of its wildlife, bodies of water, and preserved open space — is a Southern state with a relatively low level of credit card debt per consumer. The average credit card debt in Arkansas is $5,297 per cardholder as of August.

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Ohio serves 11.8 million residents as of 2022, making Ohio one of the most populous states in the nation. The Buckeye State also has among the lowest credit card debt per consumer in the United States. The average credit card debt in Ohio is $5,297 per cardholder as of August.

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South Dakota hosts the famous Mount Rushmore National Memorial. The average credit card debt in South Dakota is $5,264 per consumer as of August.

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West Virginia remains one of the few states that may pay you to move there if you work from home. The average credit card debt in West Virginia is $5,217 per consumer as of August.

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Indiana is America’s Hoosier State. The average credit card debt in Indiana is $5,216 per consumer as of August — one of the lowest in the nation.

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Kentucky has a relatively low level of credit card debt per consumer. The average credit card debt in Kentucky is $5,041 per cardholder as of August.

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Iowa ranks first in the nation in the production of corn for grain. The average credit card debt in Iowa is $4,976 per consumer as of August.

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Wisconsin remains the largest cheese producer in the nation, and consumers in America’s Dairyland have the lowest average credit card balances nationwide. The average credit card debt in Wisconsin is $4,853 per cardholder as of August.

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You can find out your credit card balance by reading your credit card statement. Your credit card balance matters because it’s your unpaid credit card debt that you are expected to repay as fast or as slow as you wish.

The slowest way to pay down credit card debt is to make minimum payments each billing cycle. The fastest way to pay down credit card debt is to pay the full statement balance each billing cycle. 

Cardholders with a credit card grace period may avoid interest charges on new purchases by paying the statement balance in full each billing cycle.The annual percentage rate (APR) on a credit card can be quite high compared with other consumer lending products. If you make minimum payments each billing cycle, it could take years to pay off the debt and the interest charges could be costly in particular. 

How much credit card debt does the average American have? The average American credit card balance is $6,039 per consumer as of August 2023, according to TransUnion data.

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In general, leaving a small balance on your credit card is not the best idea if your goal is to build credit without incurring interest charges.

Carrying a small balance may not be right for you if you can afford to pay off your statement balance each billing cycle. Unless you have a 0% introductory APR, you may face interest charges if you pay less than the statement balance.

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If your credit card has a grace period, you may avoid credit card interest charges by paying your statement balance in full each billing cycle. You may also want to avoid credit card cash advance transactions if you’re trying to avoid credit card interest charges.

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The average American credit card debt balance increased 11.5% year-over-year from August 2022 to August 2023, according to TransUnion, one of the big three credit bureaus. It identified inflation as a key driver behind balance growth.

You can calculate the national credit card debt average by taking the total balance across all credit card accounts ($1.03 trillion in Q2 2023) and dividing it by the number of U.S. consumers with a credit card account balance (165.3 million).

TransUnion uses a different methodology — a stratified random sample of 5 million consumers — to calculate average credit card debt by state. The $6,039 average credit card balance in August 2023 is a measurement of credit card debt under TransUnion’s calculation method. Cardholders who pay their credit card balance in full each billing cycle may avoid interest charges on new purchases.

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Consumers in all risk tiers use credit cards to buy goods and services. The below table highlights the average American credit card balance by risk tier, according to TransUnion data:

Average credit card balance per consumer in August 2023 by Risk Tier:

  • Super prime (781-850): $3,868
  • Prime plus (721-780): $7,396
  • Prime (661-720): $8,721
  • Near prime (601-660): $8,699
  • Suprime (300-600): $5,034

Credit card debt exists across all risk scores, but cardholders with bad credit are more likely to experience serious delinquency.According to TransUnion’s credit card debt data by risk tier (August 2023):

  • 19.14% of subprime cardholders fell 90+ days past due
  • 1.20% of near prime cardholders fell 90+ days past due
  • 0.20% of prime cardholders fell 90+ days past due
  • 0.01% of prime plus cardholders fell 90+ days past due
  • 0% of super prime cardholders fell 90+ days past due

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While it’s interesting to learn the average credit card debt in the U.S., it doesn’t help you much when you’re struggling to pay down your own credit card debt.

Most credit cards are unsecured without collateral. This means credit card account holders typically are not required to make a security deposit. Failing to pay and defaulting on your credit card bills can severely damage your credit.

When you make transactions on a credit card, the transaction activity represents an unpaid debt that you’ll eventually have to repay as fast or as slow as you wish. If you’re facing credit card debt challenges, below we highlight some ways you may manage your debt.

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Here are three tips that may help you reduce credit card debt:

1. Using Balance Transfer Credit Cards

Some credit card issuers offer new applicants 0% introductory APR financing on balance transfers. This enables you to transfer existing credit card debt to a new card and gives you a break from incurring interest charges. And when you transfer balances from multiple cards, you’re consolidating your debt as well, which can make it easier to stay on top of payments since you’ll have just one instead of multiple.

Promotional APR offers last a minimum of six months and can extend up to 21 months. Just note that you may incur a balance transfer fee, which is typically 3% to 5% of the amount transferred. With the way credit cards work usually, the balance transfer fee is added to the balance of the new account.

The key to utilizing a balance transfer credit card is to pay a portion of your remaining balance each month before you resume swiping at places accepting credit card payments. This ensures that you have the entire balance paid off by the time the promotional rate expires and the standard rate resumes.

2. Getting a Personal Loan to Consolidate Debt

Another option to pay off credit card debt is to use a personal loan to consolidate debt. Personal loans are typically installment loans with fixed monthly payments and a fixed repayment schedule. Approval typically is based on your personal credit history and credit score.

If you have good or excellent credit (661+ VantageScore® 4.0), you might be able to qualify for a loan with a lower interest rate than your current credit cards have. When you receive funding from a personal loan, you can use it to pay off your credit card debt, which may have higher interest rates — especially if your APR is above the average credit card interest rate

3. Receiving Credit Counseling

You could also look for a credit counseling service that can offer advice on how to manage your credit card debt and pay it off. There are nonprofit credit counselors who can help you to choose from one of many possible solutions, such as credit card debt forgiveness.

Credit counseling can also offer general financial education, such as explanations of important credit card definitions and tips on budgeting. Counseling can take place in person, online, or over the phone. You may be able to find nonprofit credit counseling services through a university, military base, credit union, or housing authority.

Beware that some vendors may not be legitimate credit counselors. The U.S. Department of Justice maintains a list of approved credit counseling agencies by state. Most of the reputable credit counseling agencies are nonprofit organizations that offer services at local offices, online, or on the phone, according to the Federal Trade Commission.

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Whether you have a large or small amount of credit card debt, paying that balance off as soon as possible may reduce or eliminate your interest costs. When choosing a credit card, consider the card’s standard interest rate, as well as any promotional financing offered on new purchases, balance transfers, or both.

This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.

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All rates, fees, and terms are presented without guarantee and are subject to change pursuant to each provider’s discretion. There is no guarantee you will be approved or qualify for the advertised rates, fees, or terms presented. The actual terms you may receive depends on the things like benefits requested, your credit score, usage, history and other factors.


*Check your rate: To check the rates and terms you may qualify for, Lantern and/or its network lenders conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender(s) you choose will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.


All loan terms, including interest rate, and Annual Percentage Rate (APR), and monthly payments shown on this website are from lenders and are estimates based upon the limited information you provided and are for information purposes only. Estimated APR includes all applicable fees as required under the Truth in Lending Act. The actual loan terms you receive, including APR, will depend on the lender you select, their underwriting criteria, and your personal financial factors. The loan terms and rates presented are provided by the lenders and not by SoFi Lending Corp. or Lantern. Please review each lender’s Terms and Conditions for additional details.


Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website on credit (consumer.ftc.gov)


Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.¹


SoFi’s Insights tool offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a VantageScore® based on TransUnion® (the “Processing Agent”) data.


Personal Loan

SoFi Lending Corp. (“SoFi”) operates this Personal Loan product in cooperation with Engine by MoneyLion. If you submit a loan inquiry, SoFi will deliver your information to Engine by MoneyLion, and Engine by MoneyLion will deliver to its network of lenders/partners to review to determine if you are eligible for pre-qualified or pre-approved offers. The lenders/partners receiving your information will also obtain your credit information from a credit reporting agency. If you meet one or more lender’s and/or partner’s conditions for eligibility, pre-qualified and pre-approved offers from one or more lenders/partners will be presented to you here on the Lantern website. More information about Engine by MoneyLion, the process, and its lenders/partners is described on the loan inquiry form you will reach by visiting our Personal Loans page as well as our Student Loan Refinance page. Click to learn more about Engine’s Licenses and DisclosuresTerms of Service, and Privacy Policy.Personal loan offers provided to customers on Lantern do not exceed 35.99% APR. An example of total amount paid on a personal loan of $10,000 for a term of 36 months at a rate of 10% would be equivalent to $11,616.12 over the 36 month life of the loan.


Student Loan RefinanceSoFi Lending Corp. (“SoFi”) operates this Student Loan Refinance product in cooperation with Engine by MoneyLion. If you submit a loan inquiry, SoFi will deliver your information to Engine by MoneyLion, and Engine by MoneyLion will deliver to its network of lenders/partners to review to determine if you are eligible for pre-qualified or pre-approved offers. The lenders receiving your information will also obtain your credit information from a credit reporting agency. If you meet one or more lender’s and/or partner’s conditions for eligibility, pre-qualified and pre-approved offers from one or more lenders/partners will be presented to you here on the Lantern website. More information about Engine by MoneyLion, the process, and its lenders/partners is described on the loan inquiry form you will reach by visiting our Personal Loans page as well as our Student Loan Refinance page. Click to learn more about Engine’s Licenses and DisclosuresTerms of Service, and Privacy Policy.


NOTICE: The debt ceiling legislation passed on June 2, 2023, codifies into law that federal student loan borrowers will be reentering repayment. The US Department of Education or your student loan servicer, or lender if you have FFEL loans, will notify you directly when your payments will resume For more information, please go to https://docs.house.gov/billsthisweek/20230529/BILLS-118hrPIH-fiscalresponsibility.pdf https://studentaid.gov/announcements-events/covid-19 


If you are a federal student loan borrower considering refinancing, you should take into account the new income-driven payment plan, SAVE, which replaces REPAYE, seeks to make monthly payments more affordable, and offers forgiveness of balances that were originally $12,000 or lower after 120 payments, among other improvements. Also, please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans, such as SAVE, or extended repayment plans.

Auto Loan RefinanceAutomobile refinancing loan information presented on this Lantern website is from Caribou, AUTOPAY, Engine by MoneyLion, and each of Engine’s partners (along with their affiliated companies). Caribou, AUTOPAY, and Engine by MoneyLion pay SoFi compensation for marketing their products and services on the Lantern site. 


Auto loan refinance information presented on this Lantern site is indicative and subject to you fulfilling the lender’s requirements, including but not limited to: credit standards, loan size, vehicle condition, and odometer reading. Loan rates and terms as presented on this Lantern site are subject to change when you reach the lender and may depend on your creditworthiness, consult with the lender for more details. Additional terms and conditions may apply and all terms may vary by your state of residence.


Secured Lending DisclosureTerms, conditions, state restrictions, and minimum loan amounts apply. Before you apply for a secured loan, we encourage you to carefully consider whether this loan type is the right choice for you. If you can’t make your payments on a secured personal loan, you could end up losing the assets you provided for collateral. Not all applicants will qualify for larger loan amounts or most favorable loan terms. Loan approval and actual loan terms depend on the ability to meet underwriting requirements (including, but not limited to, a responsible credit history, sufficient income after monthly expenses, and availability of collateral) that will vary by lender.


BankingSoFi Lending Corp. (“SoFi”) operates this website in cooperation with Engine by MoneyLion presenting promotions for products and services offered by other banks, lenders, and financial institutions. If you select a promotion above, you will be connected to the website of the company offering the product. The promotions presented on this site are from companies that pay SoFi and Engine by MoneyLion compensation for marketing their products and services. This may affect whether a provider is featured on this site and could affect the order of presentation. Lantern and Engine by MoneyLion do not include all providers in the market or all of their available offerings. Click to learn more about Engine’s Licenses and DisclosuresTerms of Service, and Privacy Policy.

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