CREDIT CARD DEBT RELIEF OPTIONS
In the US, credit card debt relief options are not about cutting credit card debts but also help consumers learn how to manage their spending via credit cards. The use of credit card is increasingly becoming as traditional as the apple pie. American families seem to be taking higher amounts of debt just to keep up with the rising costs of living. Debt has escalated to a level where the entire nation seems to be in dire need of credit card debt relief assistance.
A 2016 report by NerdWallet, compiled from data sourced from the Census Bureau and the Federal Reserve Bank of New York, shows that indebted households in the US have an average of $16,061 in credit balances. The report states that total household debt has risen to $132,529, from just $88,063 in 2002. While income has grown by 28% in the last 13 years, the cost of living has risen by 30% in the same period. Medical expenses have increased by 57% since 2003 while housing rose by 32% and cost of food by 36 percent. According to Sean McQuay, a credit card associated at NerdWallet, wage growth is still sluggish despite the growing economy. As a result, meeting financial obligations is becoming increasingly harder every year.
Most Americans have over the years relied on credit cards to close the gap between a slow-paced income growth and fast-rising costs of living. Credit cards provide an easy and convenient way of borrowing but quite are expensive in the long run. Presently, the average credit card interest rate stands at 18.76 percent. A recent CNBC study shows that the average American household pays a credit card interest of $1,296 every year.
Research on credit card debt conducted by ValuePenguin using data from the Federal Reserve and the U.S Census Bureau found that the average credit card debt for most American households has risen by ten percent in the last three years. What is even scarier is the fact that it would take a typical indebted household close to 14 years to pay off its existing debt by paying a minimum of 1.5% of the balance and interest.
The ValuePenguin study also exposed another shocking fact. Households with the least income have the highest amounts of credit card debt in all income categories. It appears people who cannot afford credit card debt have the most. While the average credit card debt in all American households is around $5,700, households with zero or negative worth carry an average debt of $10,3017, which is 27% more than households with a net worth of $500,000 and above. Debts, especially credit card debts, have become another symbol of American tradition.
Credit card companies are also known for using convincing skills to encourage cardholders to keep on spending with little regard to whether or not the customer is financially capable of paying the debt incurred over time. The companies woo users with all sorts of incentives such as low-interest periods, 0% interest card transfers, tempting cash back and airline miles offers, and much more. What many cardholders fail to see is the fact that the perks are actually in favor of the credit card company. For example, the 0% or low-interest rate they give you will skyrocket as soon as the promotional period ends.
In a perfect world, you can easily solve your credit card debt problem by observing a few months of frugal living while focusing on a tight budget. Unfortunately, no matter how much you tighten your belt, some debt problems are just too huge to be handled by traditional payment methods. As a result, many people end up paying credit card debts month after month yet the balances keep on piling up. They struggle to eliminate their debts but don’t seem to be getting anywhere. This is where credit card debt relief comes in. Credit card debt relief provides a better way forward in managing your debts.