Current Average Credit Card Debt
Credit card debt is on the rise and the Federal Reserve says this past year saw the biggest jump in credit card debt for over 20 years. With inflation and interest rates also rising, more and more people are struggling to pay bills and turning to credit cards as a means of covering expenses. It’s a vicious cycle and maybe you are wondering what to do about your own credit card debt?
In this article, we talk about how the rise of credit card debt ties into the impending recession and what you can do to get rid of your own debt.
The Average Credit Card Debt in America
According to Experian, the average credit card debt in America is approximately $6,000 which is 15% more than just one year ago. This brings the total credit card debt to $925 million and there’s no reason to expect a reverse of this trend in the year ahead. The average interest rate on credit cards is also the highest in nearly 30 years at 16.27% and those carrying a balance are getting an average of 18.43% APR. Finally, the percentage of delinquencies on credit card is rising for the first time in decades and it all points to a crisis in which every-day Americans are struggling with their debt.
But why is credit card debt so out of control?
Why Credit Card Debt is Rising in the US
Spending was down at the beginning of the pandemic as people were unable to travel and interact in public spaces etc. Stimulus checks and financial support programs helped bolster people’s finances and credit card debt was decreasing. However, the checks and programs stopped and when people began spending again, inflation ensured they were spending more than ever.
The above should help explain why credit card debt began rising to unprecedented levels. Rising rates of inflation and interest rates are sure to continue this trend and the impending recession will likely leave more people than ever with an overwhelming amount of debt. But what can you do about it?
Credit Card Debt: Working with a Credit Attorney
Working with a credit attorney is the best way to ensure you achieve the best possible outcome. While every circumstance requires a different approach, a credit attorney will primarily help you in the following two ways:
- Negotiating a Lower Loan Amount
The truth is, credit card companies prefer to avoid legal proceedings and they also know that bankruptcy can potentially eliminate the debt entirely. This is why credit cards can be settled rather aggressively and a skilled negotiator can significantly reduce the balance owed. In case you might be asking yourself, credit card lawyers can sometimes reduce the lump sum of your debt by 30-50%. As a result, you can come out of the process with a reduced term, lower monthly payments and a realistic plan of action to get you out of debt.
- Act as Your Legal Representative
Debt attorneys have a wealth of experience that can bring peace of mind and This is especially true for those who feel overwhelmed by their credit card debt. They act as your point of contact which will save you going back and forth with the creditor and your legal representative for any court proceedings. This is important because many borrowers end up facing litigation and rather aggressive demands from debt collectors. Your credit attorney can respond to this litigation and use their legal knowledge to protect your rights and interests.
The average credit card debt in America has been rising quickly over the past two years. Many borrowers are unable to make repayments and are facing the prospect of litigation. If you find yourself in a similar situation and feeling overwhelmed, it’s important to take action right away. But maybe you need some help and guidance from an experienced credit card lawyer.
Get in touch with our team and we can discuss your options today.