More Americans are struggling with high credit card balances

On Behalf of | Nov 18, 2022 | Bankruptcy |

Thanks to extremely high rates of inflation in virtually every area of life, simply staying financially afloat is more difficult than ever for average Americans. As daily life becomes more expensive, more people are relying on credit cards than ever before. You may be one of the many consumers who use their cards for most, if not all, purchases, including groceries, clothing, medical bills and more. 

If you have high credit card balances and are unsure of how you will manage them on your own, you are not alone. Studies find that credit card balances are up 15% this year, representing the largest one-year leap within the last two decades. As you consider your financial options, you may benefit from considering the legal ways that you can deal with these balances and reclaim your financial future. 

Is it more difficult to get rid of credit card debt? 

Statistics indicate that consumer goods are 8% more expensive right now than they were one year ago. With this in mind, it may not surprise you that credit card balances are high, as even the most basic goods cost more. Another factor that may be contributing to higher credit card balances are higher interest rates. Consumers may only be able to manage making minimum payments, which is not effective toward reducing the overall balance, and in the meantime, they continue to use their cards for most purchases. 

The average credit card interest rate is 19%, which is higher than the average 16% interest rate last year. Some Tennessee consumers have multiple cards with high balances, and they may not be able to manage making payments each month. In some cases, a practical step would be to transfer balances to a 0% balance transfer card. This may consolidate your debt and make it easier to make payments each month. 

What if you can’t manage on your own? 

Even if you transfer balances and take other steps to address your debt, it may not be enough to have a positive effect on your total credit card debt. In this situation, you may benefit from Chapter 7 bankruptcy, an option available to consumers who have a significant amount of unsecured debt and meet other qualifications. If you do not see a way out of your current debt situation, it might be helpful for you to consider this option in pursuit of a better financial future. 

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