Some people in Illinois may find credit cards to be frivolous. After all, with a swipe of the card any luxury item can be purchased without thought about how the card owner is going to pay the debt back. However, credit cards are often used for much more necessary purposes. A car repair, a medical bill, even food or gas may all get put on a credit card when a person has no other means to afford these basic life necessities.
In fact, on average a person in the United States carries a credit card balance of approximately $9,600 monthly, amounting to $1 trillion in debt. Moreover, 12 months ago, those with a credit card in the United States were paying on average approximately $1,185 in interest each year. However, given the 0.75 point interest raise, now credit card holders pay on average $69 more annually in interest. And this is not the end of the story — there are two more interest rate increases on the table this year raising the average annual interest amount paid to $116 annually.
While this might not seem too terrible, keep in mind that raises in income aren’t matching these raises in interest rates. Moreover, since 2003, medical expenses went up about 57 percent, the price of food went up 36 percent and the costs of housing went up 32 percent according to one website. This makes it very hard for many Americans to make ends meet financially.
As this shows, credit card debt is a serious issue for many American families. While they may rely on credit cards to keep abreast of their debts, in the end it is the credit card debt itself that they cannot cope with. When this happens, they may want to consider filing for bankruptcy, as a means towards securing a more stable financial future.
Source: New York Post, “Americans are swamped in $1 trillion of credit card debt,” Catherine Curan, April 16, 2017