Approximately 43 percent of American consumers say they intend to accrue more debt in the next six months. This is despite interest rates increasing, making the cost of borrowing more expensive. This information comes from a recent study published by LendingTree.
LendingTree surveyed more than 1,000 individuals regarding their spending habits. They found that 61 percent of them already carry some level of debt. Approximately 80 percent of consumer debt is linked to expenses that are considered necessary, such as healthcare expenses or other emergencies.
The survey also found that consumers with young children are more likely to add debt than individuals without children. American consumers who have lower credit scores are also more likely to add debt than those with higher FICO scores. In fact, 80 percent of consumers with a FICO score of 300-579 carry some level of debt, as compared to only 46 percent of individuals with FICO scores of 800-850 carrying debt.
Of this debt load, credit cards account for the largest portion of debt, coming in at 70 percent. Car loans account for 33 percent of all consumer debt, while mortgages account for 29 percent. Medical debt comes in at the fourth highest category, especially when it comes to individuals with lower FICO scores.
Financial experts do not necessarily see using credit cards to pay for necessary expenses instead of using cash as a bad thing, so long as the consumer is able to pay his or her credit card off in full every month. Not only does this help the person’s credit score, but it also allows them to utilize credit card rewards to add funds to their budget.
As inflation continues to increase at a four-decade high, the Federal Reserve has said they intend to increase interest rates as soon as next week to account for the increased cost of living across the country.
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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.