Why you've been mismanaging your finances for the last 10 years - CNBC

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If you have one resolution for 2020, make it to clear the decks on your credit card debt.

About 2 out of 3 consumers with credit cards have been toting the same balance or higher over the last decade, according to a recent survey from Bankrate.com.

The personal finance website took an online poll in October of 2,257 adults, of whom 1,908 were credit card holders.

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Not only is the debt dragging down these consumers' balance sheets, it's also a weight on their minds.

Two-thirds of the credit card holders surveyed said they are as stressed or more over the balance on their cards compared to January 2019.

"Generally speaking, the economy is doing well — there have been 10 years of growth," said Ted Rossman, an analyst at Bankrate. "But the pitfall for people is that just keeping up isn't enough."

Paying over years

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Wages and salaries ticked up by 2.9% for the 12-month period ending September 2019, according to data from the Bureau of Labor Statistics.

The problem is that while compensation has risen for workers, so have their spending habits.

"They have jobs and they've been getting raises, and I think people are spending right up to that limit," said Rossman.

The holidays are especially dangerous for these shoppers, as that's when they can load on even more debt. Consumers expect to spend an average of $1,649 this holiday season, according to credit reporting company Experian. That's a $700 increase from the prior year.

All those purchases add up, especially now that the average interest rate on a credit card is 17.25%, according to CreditCards.com.

"The lines blur between Christmas 2017, 2018, and 2019, where you kind of forget which debt is which," said Rossman. "You don't want to be in the same position a year from now."

Squashing debt

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One way to tackle costly credit card debt is to get a balance transfer card. These cards allow you to pay off your balance generally with 0% interest over a specified period of time, typically as long as 15 months, Rossman said.

Shop carefully. While these cards can help you consolidate debt and save money on interest, you could be on the hook for a balance transfer fee of 3% to 5% of the amount you move.

You also need to have a plan to pay off the balance and stick to it. The 0% offer is for a promotional period, and your rate could skyrocket after that. Make sure you can afford the monthly payment over that specified time.

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Finally, it's not enough to squash the debt, you also have to address your behavior. See where you can cut back on monthly expenses that are chewing up your cash.

"You ultimately have to bring in more money or learn to spend less," said Rossman.

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Why you've been mismanaging your finances for the last 10 years - CNBC
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