Americans expected to fall deeper into pit of credit card debt in 2013
Early in this new year, the U.S. is already seeing what could be a disastrous trend coming to life. As lenders and Americans sense an end to the recession, purse strings are beginning to loosen. Unfortunately, experts predict that spending is quickly spiraling out of control and the average American will fall behind on his or her bills this year.
The average borrower had less than $5,000 in debt last fall. Predictions have that number rising to $5,500 by the end of 2013. While this may not seem much of a difference, when multiplied by the number of people living in the U.S. today - nearly 314 million - that adds up to more than $150 billion in additional debt. Nearly 10 million people live just in Georgia which accounts for $5 billion of that additional debt.
Credit card debt is a big part of the problem. Experts warn that the percentage of people who are more than 90 days late on payment of credit card bills will also rise, leading to a rise in bankruptcy filings.
Why is credit card debt rising?
Many issues compound the nation's debt problems:
- Continued slow job growth keeps many from earning sufficient amounts to pay their normal bills.
- A rise in payroll taxes means employed people take home less pay.
- Credit card companies are giving cards to more people.
- Easily obtained credit makes it easier for many to acquire more debt.
- Young adults who grew up using credit cards tend to amass more debt than the older generations and pay off their debts much more slowly.
Fortunately, most credit card users can follow some simple steps to help pay down or pay off their cards.
How to pay down your credit card debt
If you find yourself acquiring more credit card debt than you can pay off each month, take some proactive steps to get yourself back on track:
- Always pay more than the minimum amount due each month as minimum payments alone will not typically settle your bill for years to come.
- Strive to pay off and close one credit card at a time until you have only one primary card and one for emergency use.
- Leave your credit cards at home and in a hard to reach place so you are less likely to use them.
- Carefully monitor what you spend each week so you are less likely to whip out the plastic for impulse buys.
If, however, you find yourself in a financial situation that you cannot easily resolve, seek the counsel of a debt relief lawyer.
Help is available for those in debt
Credit card debt is not the only issue plaguing our nation. In one quarter last year, residents across our nation added $18 billion in car loans and $23 billion in new student loan. For many struggling with debt, the problem is not of his or her own making. Often, financial troubles arise after a job loss, illness or injury, divorce or other life-changing event.
An experienced bankruptcy lawyer can advise you of the options available to you. Upon meeting certain qualifications, a Chapter 7 bankruptcy allows you to erase most, if not all, of your unsecured debts and a Chapter 13 bankruptcy allows you to restructure your debts and can allow you to retain ownership of your home. Consult with an attorney and find out what you can do to attain financial freedom.