Surprising Reason Behind Large Credit Card Balances
It comes as no surprise that Americans are carrying a lot of debt. Rising debt seems to be the norm for many American families. Credit cards are a great option for purchases that fall outside of the monthly budget, or for emergency household or car repairs. The goal is to pay off the balance as soon as the credit card statement comes in the mail, but for many, that is not an option. More and more consumers are using credit to cover regular household spending. One of the biggest surprises in credit card balances? Groceries.
Using Credit for Daily Living Expenses
According to recent reports, the average credit card balance is $6,200. This amount of debt can place a heavy burden on consumers. Rising costs in healthcare and education are partly to blame for the increase in debt, as is the fact that credit cards are more easily attained. Grocery prices have increased significantly in response to the COVID-19 pandemic, further burdening consumers, many of whom place the weekly groceries on a credit card. For some, the pandemic has led to job loss, placing even more stress on consumers.
Steps to Reduce Debt
If you find yourself in a debt spiral, here are some options that may help:
- Make and keep a budget. This is an important step for everyone. Make sure you properly document your expenses and track every dollar.
- Negotiate your debt. It’s a good idea to keep an open communication with your credit card company. Explain your difficulties and see if an arrangement can be made. Your credit card company may offer to reduce your interest rate or the monthly payment amount.
- Pay off small debts first. Concentrate on paying off the debt with the smallest balance first. When that debt is paid off, concentrate on the next highest. This strategy can help pay your debt off faster.
If you are burdened with high credit card debt and do not have a way to pay it off, bankruptcy may be an option for you. The office of Gingold & Gingold has the experience you need to file bankruptcy and get you back on your feet quickly. Fill out a contact form or call us today to schedule a consultation. Let us help you get the fresh start you need today.