A small increase in the Federal Reserve’s interest rates could have a dramatic effect on the American public — especially those who are carrying consumer credit-card debt. As it stands, WalletHub reveals that United States consumers are holding on to a lot of credit card debt at the moment and the problem is only getting worse — to the tune of $92 billion worth of extra debt accrued last year.
Oddly, banks have been very happy to dole out this debt to consumers at low interest rates. However, according to WalletHub, borrowers could find themselves in trouble as the Fed increases interest rates. According to the financial news website, during the past 30 years there were four instances when consumers loaded up on credit card debt like this, and in every case, the Fed responded by increasing interest rates.
This Wednesday rates will go up by .25 percent and two more increases will hit during the rest of the year. The problem is, debt levels are already higher than what most consumers can deal with. With an average household debt of approximately $8,600, credit card debt is approximately $138 higher on average than consumers can sustain.
If you are already suffering under unsustainable amounts of credit card debt, you might want to educate yourself on the various debt resolution options available. Bankruptcy and other strategies could assist you in getting your financial life back under control again, so that you can feel financially secure and start saving for the future. Wouldn’t it be excellent to be free of your toxic credit card debt once and for all?
Source: Market Watch, “For consumers with credit-card debt, Fed rate hike will sting,” Anoro Goudiano, March 22, 2018