People in Tennessee often use credit cards for many different types of purchases, including daily needs, vacations and even emergency expenses. There are many who are able to pay off their balances every month, but for some, it’s not so easy. For those who carry a large amount of credit card debt, the threat of a potential recession in the future could be troublesome.
One reason that a recession could be bad news for credit card holders is that the interest rate is higher at this point than it was in the past. The average sits at just under 18%, and this could lead to even higher increases of debt if a recession impacts a person’s ability to pay his or her balances in a timely manner. Even at this time, when the economy is good and consumer confidence is high, delinquent credit card accounts are becoming more of a problem.
A recession could impact Tennessee consumers in many ways. Statistics indicate that only 35% of Americans have enough money in the bank to cover their expenses for at least three months in case they lose their jobs. Statistics indicate that around 28% of people do not have any savings at all. For some consumers, debt is such a problem that they expect to die still owing money.
Credit card debt can be an indication of serious financial problems, and it can cause great strain for an overwhelmed consumer. If a person can no longer manage his or her debts, it may be beneficial for that person to consider the benefits of bankruptcy. This process can allow a person to deal with certain types of unsecured debt, which may include credit card balances.