Ohio residents and Americans elsewhere have been turning to their credit cards as they start to feel better about the economy. According to 'The Nilson Report," credit card debt topped $1 trillion in 2016, which was the first time that has happened since the start of the Great Recession. One reason why Americans rely more on credit cards is because household incomes have not kept up with increasing prices. Therefore, people are increasingly making purchases on credit to make ends meet.
While they are popular, credit cards are an expensive way to borrow money since the average interest rate is 19.36 percent. The typical household pays $1,332.80 in credit card interest each year. While overall debt levels are close to what they were in 2007, less of the deficit is due to credit cards. Instead, Americans have higher rates of mortgage and student loan debt.
Credit card companies are offering better rates and perks to attract new customers. Only $650 billion out of the roughly $1 trillion in card debt was subject to finance charges as users held a balance from month to month. While amount this was less than the percentage of student loan balances subject to finance charges, nearly four times as many people have credit card debt than student loan debt.
Those who are looking to get a fresh financial start may wish to consider filing for bankruptcy. An attorney may be able to help individuals learn more about the process and its benefits. In most cases, filing for bankruptcy will grant debtors an automatic stay from creditor collection actions. This may allow them time to renegotiate their mortgages or car loans before their property is either foreclosed upon or repossessed. Unsecured debts may also be discharged in full in a bankruptcy proceeding.