Everyone has unexpected expenses that pop up. Not everyone has the money to cover those expenses, however. When this happens, many people in Illinois and elsewhere may find themselves using their credit cards for more than they normally would. This in turn may lead to credit card debt that can quickly grow out of control.
According to a recent report, most Americans lack the funds to deal with an emergency situation. In fact, half of Americans cannot even come up with $400 to cover a relatively minor emergency. Studies from the Federal Reserve suggest that the average middle class family with an income of roughly $50,000 annually only has enough money saved to survive for days. Why?
Spending is part of the problem. However, wage stagnation and increasing living expenses are the biggest contributing factors. It is hard to save when everything costs more but income stays the same.
Credit card use can be good for one’s overall credit score when used with care. Unfortunately, when emergency strikes, such as the need for car repairs or unexpected medical issues — among others — the pressure to pay bills takes over, and credit card debt skyrockets. Illinois residents who only make minimum payments may spend thousands more than what they borrowed and may spend years trying to pay it back — if they can. When faced with significant credit card or other debts, debt relief options may be available. An experienced bankruptcy attorney can review the finer details of one’s financial situation and provide information about any available options.
Source: msn.com, “Why Half of Americans Can’t Come Up With $400 in an Emergency”, Ben Taylor, Oct. 1, 2017