Families in Ohio and across the country send credit card companies an average of $1,292 each year in interest payments as part of paying off their balances, but that figure will likely be going up in the coming months. The U.S. Federal Reserve announced a quarter point interest rate increase on Dec. 14, which means that Americans will soon be paying more than 19 percent interest on average for the convenience of revolving debt.
Financial experts are worried about the growing amount owed by American families, and they are particularly concerned about their soaring credit card debts. A study released by the financial guidance website NerdWallet shows that average household obligations in the United States rose from $88,063 in 2002 to more than $130,000 in 2015, and revolving balances now make up $16,061 of this debt. The U.S. Census Bureau and the Federal Reserve Bank of New York provided the data behind the report.
Credit cards can be a fast, convenient and practical way to borrow small sums of money for short periods, but they can become ruinously expensive when monthly payments barely eat into outstanding balances. Many analysts expect interest rates to continue climbing for the foreseeable future, and this could leave many American families in extremely vulnerable financial positions.
Individuals and families in Ohio often turn to credit cards when they are struggling to make ends meet, but revolving debt is a path that offers few avenues of escape. Experienced debt relief attorneys could explain how filing a personal bankruptcy protects consumers from creditor harassment and offers the possibility of a new financial start. Attorneys could also describe the differences between a Chapter 7 or Chapter 13 bankruptcy filing and alternative options such as credit negotiation and debt settlement.
Source: The Washington Post, “Federal Reserve raises interest rates for second time in a decade”, Jim Tankersley, Dec. 14, 2016