Sometimes, a person in Long Island has no choice but to put a purchase on a credit card. For some, it may be an unexpected job loss or illness that leads them to use a credit card to pay for food and clothing. Other times, it could be an expensive car repair or home repair that they simply cannot afford. No matter what the reason, according to one source, people across the United States are incurring increasing amounts of credit card debt.
In fact, a recent NerdWallet report, using data from the Census Bureau and the Federal Reserve Bank of New York, reveals that the average amount of credit card debt a U.S. household has is around $16,000. This is just slightly less than the high in 2008.
Credit card debt is only one type of debt many Americans carry. According to the NerdWallet report, the total amount of debt owed per household — such as credit card debt, mortgages and medical debt — averages to over $132,500.
But, the growth of household income over the past 13 years at 28 percent, has not kept up with the cost of living, which over the same time period increased 30 percent. Moreover, since 2013, medical expenses went up almost 60 percent, the cost of housing went up over 30 percent and the cost of food went up over 35 percent. These increases in living expenses may have been the reason why more Americans have had to rely on credit cards to get by day-to-day.
However, when credit card debt becomes too much to bear, debtors may wonder what they can do to pay back their debts, stop harassing phone calls from debt collectors and get back on their feet financially. One option people may have in such situations is filing for bankruptcy. The Chapter 7 and Chapter 13 bankruptcy processes provide a means for debtors to settle their outstanding debts and move forward with a clean financial slate.
Source: CNBC, “US households now have over $16,000 in credit-card debt,” Jessica Dickler, Dec. 13, 2016