According to a recent study, American consumer credit card debt is higher than ever. The reason? According to the study, it appears that the cost of living has been increasing while incomes have not been increasing in time. This has been a trend for the last 13 years.
Although we hope that America’s financial luck will change, it appears that medical costs have risen by 57 percent during the last 13 years. Furthermore, the cost of beverages and food have increased by 36 percent. Unfortunately, these and other categories costs have risen sharply, but American incomes have only risen by about 28 percent.
All this translates into Americans incrementally using their credit cards in order to make ends meet. All those credit card bills that Americans haven’t been able to pay off, have been expensive in terms of interest payments. That means that Americans who don’t have enough money now have even less money because households are paying an average of $1,309 annually in interest payments.
The fact is, it’s getting more expensive to be an American every day. Although you might blame your credit card debt on reckless spending and bad financial planning, the fact is that in a lot of cases, it’s not the credit card holder’s fault. So many Americans are merely trying to pay for necessities because they have incomes that aren’t sufficient to pay all their bills.
Which situation are you in? If you’re one of the rare Americans who doesn’t have any consumer credit card debt, count yourself as lucky. If you’re one of the normal ones who has a high credit card balance, and if you’re also someone who can’t pay that balance off, then maybe it’s time for a change. By investigating bankruptcy and other debt resolution strategies, some Americans might start to see a light at the end of their debt tunnels.
Source: Nerd Wallet, “2016 American Household Credit Card Debt Study,” Dec. 14, 2016