Credit card debt is often talked about in the United States, because many people suffer from too much of it overwhelming them and leading to bankruptcy. Sometimes, using credit is the only option, but consumers have been burdened with high interest rates and payment plans that can be costly. If you have credit card debts, you know that even small purchases can sometimes add up to big interest payments over time, making you pay substantially more than if you’d been able to pay for an item outright.
In the first quarter of 2015, U.S. consumers paid off close to $35 billion of credit card debt, but that’s not even a chip in the credit-debt iceberg. Each year, consumers have made increased payments of around 7 percent more per year, but the debt consumers have been left with still stands at over $831 billion. By the end of 2015, it’s expected that another $55.8 billion will be added to the already climbing debts of the country. In 2014, $57 billion of new debt was added despite higher payments to cover the debts.
According to CardHub’s study, each household averages around $7,177 in credit card debt. This suggests that consumers do need to learn to better manage their debts, but that’s not the only issue. A failing economy, lack of work and other issues force people to use credit when they otherwise may not.
To manage debt, CardHub suggested sticking to a tight budget, raising payments and building an emergency fund. If you find you’re too deep into debt, one of the options you have is to seek a bankruptcy. This could help you get back on your feet financially.
Source: Fortune, “Here’s how much credit card debt we’ll have this year,” Tom Huddleston, Jr., June 10, 2015