American credit card debt has soared to unprecedented levels. Recent data reveals that the total amount of credit card debt in the United States is now at over $1 trillion. This is the highest it’s ever been in history according to the Federal Reserve.
Approximately 57 percent of Americans have under $1,000 in their bank accounts at year-end 2016. Furthermore, the average household debt in the United States at year-end 2016 was $16,000.
Having credit card debt is dangerous
Debt that’s spiraling out of control is the worst kind of debt that you can have, and this is something that can happen easily with credit cards. If you are carrying a balance on your credit card, you will be accruing interest on that balance each month. Then, you’ll be accruing interest on the interest each month as you continue to hold onto the card.
It isn’t uncommon for credit card holders to suddenly discover that they’re up to their necks and nearly drowning in debt. By the time they wake up to their debt problems, though, it’s often too late for the credit card holder to catch up and pay it down.
When you’re carrying too much debt, you’ll have a difficult time getting approved for additional loans. For example, getting approved for a home or car loan could be difficult. A bad credit rating could also make it harder for you to rent an apartment and get hired for a job.
Bankruptcy might be the solution
If your primary problem is credit card debt, bankruptcy could be an excellent solution for your debt troubles. Credit card debt tends to be some of the easiest debt that you can resolve in the U.S. bankruptcy process.
Source: Business Insider, “Credit card debt has reached an all-time high — here’s how to get yours under control,” Maurie Backman, Sep. 29, 2017