Credit card spending among American consumers has hit a high of $1.2 trillion with $116 billion of this balance added during 2023 alone. Some areas of the country are adding to this debt balance more than others with California, Texas, and Florida being at the top of the list.
WalletHub recently conducted a study of all 50 states, using data reported from TransUnion and the Federal Reserve, adjusted for inflation. They found that certain areas of the country have been contributing significantly to the current national credit card debt while others have been contributing significantly less.
American consumers added a total of almost $43 billion in new credit card debt in the second quarter of 2023, which is the second largest increase seen in a second quarter ever. When compared to the same quarter last year, consumers added 16 percent more credit card debt.
In the second quarter of 2023, the average household credit card balance was $10,170, which is just $2,242 below the record set in the fourth quarter of 2007.
States in the top ten with the largest credit card debt increases include California, Texas, Florida, New York, Illinois, Pennsylvania, Georgia, Ohio, New Jersey, and North Carolina. California came in first with an average household credit card debt of $9,796 and total statewide credit card debt of over $152 billion. Texas was second with an average household credit card debt of $9,216 and statewide debt of over $111 billion. Florida came in third with an average credit card debt of $9,053 and statewide credit card debt of over $87 billion.
States with the smallest increase in credit card debt include Wyoming, Vermont, North Dakota, South Dakota, Alaska, and Delaware. Spending does not appear to be on the downward trend for the remainder of 2023. Preliminary data for July shows that a 7.72 percent increase in credit card debt spending was seen as compared to July of 2022.
As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges. It is not surprising with the high interest rates, unreasonable fees, harassing debt collection calls, penalties and never-ending minimum payments that do not even make a dent in your actual debt.
Filing for bankruptcy is a viable option for those struggling with insurmountable credit card debt. Chapter 7 is the fastest form of consumer bankruptcy and forgives most unsecured debts like credit card debt, medical bills, and personal loans. There are certain qualifications a consumer must meet in regard to income, assets, and expenses to file for Chapter 7 bankruptcy, which is determined by the bankruptcy means test.
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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.