Credit Card Debt Archives - Page 10 of 14

Can Wage Garnishment Be Stopped on Credit Card Debt?

Posted on April 10, 2019by Admin

Credit card debt is one of the most common problems facing those with serious financial issues. The stress can become compounded with collection calls, the threat of lawsuits and wage garnishment. A wage garnishment can be hard to stop once it begins and can be devastating to those already facing financial hardship. However, certain protections do exist for those who qualify.

Types of Garnishment.

Two different types of garnishment exist: wage garnishment and non-wage garnishment. A wage garnishment means the money to pay the debt is taken directly out of your paycheck. However, with a non-wage garnishment, the money comes out of your bank account. Wage garnishments do not happen automatically. They come from a court order and a judgment on the debt. When it comes to credit card debt, the creditor must first have filed a lawsuit and received a successful judgment against you in court.

Where You Are in the Process.

Many times, you can stop the wage garnishment from happening depending on where you are in the process. If you find yourself at the start of the legal process or if a judgment has not yet been issued, you may be able to work out a plan directly with the creditor. However, if a lawsuit has already been filed, it is recommended you seek out the assistance of an attorney to protect your legal rights. The worst thing a person can do is ignore the lawsuit. Ignoring a lawsuit will result in the creditor winning a judgment against you by default.

Protection from Wage Garnishment.

Once the judgment on the debt is issued, stopping the garnishment can be very difficult. Sometimes, however, it is possible to at least negotiate the amount owed with the creditor to lessen the length of the garnishment. If you tried to work with the creditor before the lawsuit was filed and are able to work with them before the judgment is entered, you may be able to negotiate down the amount owed. Once the judgment is entered, however, many creditors are simply not motivated to settle on the garnishment. After all, they have already incurred legal fees to file a lawsuit and be granted a judgment, so they may have very little motivation to settle on receiving payment for their debt.

Many clients ask if bankruptcy can eliminate wage garnishment. Bankruptcy laws in Florida provide clear protections for individuals and families. By taking proper action, you can quickly stop wage garnishment while building a strategy for a better financial future. If you are struggling to pay off credit card debt, this category of debt can be easily discharged in bankruptcy. If the writing is on the wall that you will be forced to pay this unsecured debt in a garnishment, it may be a good option to explore with a bankruptcy attorney.

Exemptions to Wage Garnishment.

Once a garnishment order has been issued, many clients worry that they will lose all or most of their paycheck due to the garnishment. However, certain wage garnishment exemptions do exist in these situations to protect you. The Department of Labor has rules for how much of a person’s paycheck a creditor can garnish. For most ordinary garnishments, a creditor is only allowed to garnish the lesser of 1) 25 percent of the person’s disposable earnings, or 2) the amount of the person’s disposable earnings that is more than 30 times the federal minimum wage. The purpose of these laws is to protect consumers from not being able to pay for basic, living expenses. Florida offers a “head of family” exemption, which ensures that if a person provides more than half the cost to support another person or child, that individual’s wages will be protected. If your income is based on Social Security, child support, disability benefits or spousal support, this income cannot be garnished, which offers protection to individuals who live on a fixed, limited income.

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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.

Americans Will End Up Paying $122 Billion in Credit Card Interest in 2019

Posted on April 4, 2019by Admin

It is a staggering headline, but just last year Americans paid banks $113 billion in credit card interest, according to a recent study from MagnifyMoney. That is up 12% from interest paid in 2017, and up 50% from 5 years ago. And the amount of interest is only set to increase in 2019. Credit card debt plagues consumers from all walks of life. The larger the debt, the more likely that cardholder is accruing interest.

What is causing this increase in interest? Financial analysts believe that now since a decade has passed since the big financial crisis in 2008, consumers are feeling more confident in their abilities to borrow more. As a result, the total amount of credit card debt has reached a record high, since before the recession. However, borrowers are also paying more when it comes to interest on the amounts they borrow, as banks have passed recent Federal Reserve rate hikes onto their customers.

The average APR on credit cards has gone up approximately four percentage points over the past five years. The average APR on a credit card is 16.86 percent, according to the Federal Reserve.

The problem with credit card interest is it can make paying down your debt very difficult. In fact, according to the Federal Reserve’s Survey of Consumer Finances, 40 percent of all active credit card users carry a balance from month to month on their cards.

While credit card interest can make paying down the overall balance very difficult, certain methods can help in conquering your debt. If a consumer is struggling to pay multiple credit cards, the snowball method can help in paying one card down at a time. Using this method, the consumer tackles the card with highest balance or highest interest rate. The consumer continues to pay the minimum amount owed every month on the other cards while putting all other money on the first card. Once that first card is paid in full, the consumer then takes the second card with the second highest rate or second highest balance. This process continues until all cards are paid off in full. While this method can take some discipline, it is a method with proven success.

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Bankruptcy Law, Credit Card Debt, Debt Relief

Payoff Strategies to Help Lower the Stress of Your Debt

Posted on March 29, 2019by Admin

Money problems are arguably one of the biggest stressors Americans face today. When someone is dealing with a large amount of debt, the stress can compound quickly. Whatever type of financial issue someone may be facing, whether it be credit card debt, the possibility of foreclosure, or student loan debt, this added stress can adversely affect a person’s overall well-being, their personal relationships, even their health.

The following methods are just a few ways consumers can get that financial burden and added stress under control.

Credit Card Balance Transfer

If a person is dealing with a lot of credit card debt on multiple cards or balances on cards with high interest rates, a balance transfer may be a helpful tool to not only consolidate that debt, but also transfer it to a card with a zero or low interest rate. Having a lower interest rate or even none at all can make paying off the card that much easier. It can also help to have all debts consolidated into one payment rather than scattered throughout multiple credit card payments. However, it is extremely important that the cardholder be aware of the timeline for how long that low or zero percent interest rate will last. These promotional rates will not last forever, and if the debt is still there after the promotional period expires, the cardholder can be stuck with an even higher balance with an even higher interest rate.

Pay Off Credit Cards Through the Debt Avalanche Method

If someone is facing large balances on multiple cards, the thought of ever paying off all of the cards can seem like an impossibility. The best rule of thumb to keep in mind when attacking credit card debt is to tackle one credit card at a time. This process is best done through what is known as the debt avalanche method. How this method works is the debtor lists all of his or her debts from highest interest rate to lowest. The consumer should take the card with the highest balance or the highest interest rate first and pay as much as he or she is able to comfortably pay on that one card, while continuing minimum monthly payments on all others. Keep paying on the first card until it is paid in full. Once the first card is paid, take the payment that was going towards the first card and snowball it into the second card’s payment and so on until all cards are completely paid off. While this method may take some time and discipline, many people have had great success in conquering their debt through this process.

Pay Biweekly

Just because the bill comes once a month does not mean the cardholder is restricted to only paying on the card once a month. One good way of paying down debt is to make multiple payments on the debt throughout the month. It helps to at least pay on them on a biweekly basis, especially if the cardholder is paid every two weeks. As soon as the paycheck is deposited and before the money can be spent, put what can be paid towards the card first before anything else. This method will allow the cardholder to reduce the balance owed quickly and make progress before interest can accrue every month.

Consider filing for bankruptcy.

Many people feel an obligation to pay what they owe, even if they will never be able to pay off the debt. Bankruptcy laws allow individuals to gain a fresh start, so they can take care of themselves and their families. It wipes out all unsecured debts including credit cards, medical bills, personal loans, and more. If you are behind on your mortgage payments, filing for Chapter 7 bankruptcy can allow you to stay in your home and catch up on your payments or negotiate with your lender. This is all thanks to the automatic stay which immediately goes into effect and prohibits your mortgage lender from foreclosing on your home. Not sure if bankruptcy is right for you, review our 5-Point Checklist.

Related Resources:

https://thriveglobal.com/stories/payoff-methods-to-lower-the-stress-of-your-debt/

Credit Card Debt, Debt Relief

How Late Payments Affect Your Credit Score

Posted on March 28, 2019by Admin

Missing a credit card or loan payment can be an upsetting feeling. The lender may charge you a late fee, but worse your credit score can be negatively affected. The good news is, your payment must be a full 30 days late before a lender can report it to the credit bureaus. This means that if your payment is made a few days later or even a couple of weeks past the due date, it will not harm your credit score.

Once the payment is past the 30-days late point, however, the account holder should expect his or her credit score to take a hit.

According to the FICO branding score model, credit bureaus do consider payment history important. In fact, payment history accounts for 35 percent of a person’s credit score. It is important to understand that not every person is affected in the same manner when it comes to how late payments hurt a credit score. Many different factors are at play when it comes to credit scoring.

For example, not all lenders use the same credit scoring model when reviewing a borrower’s qualifications. Hundreds of different credit scores are available for lenders to use. Many use the FICO score, as well as VantageScore, a credit score that was created by the big three credit-reporting agencies, TransUnion, Equifax and Experian. Ultimately, it is up to the lender to decide which type of credit scoring model to use when reviewing a borrower’s qualifications.

How badly a missed payment can affect a person’s credit depends largely on which credit score model a lender is using. Older FICO models, which are still used by the mortgage industry, consider an isolated 30-day missed payment a bigger deal when it comes to a person’s score, while the newer FICO 8 scoring models give borrowers a little more leeway. With these newer models, one missed payment will not have as serious of an effect as multiple late payments.

The problem is most lenders do not tell the borrower what type of model or version they use when processing a lending application, which means the borrower may have no way of knowing whether a one-time late payment will hurt him or her in the loan process.

Other factors play into how a late payment can hurt a borrower’s credit score. One of these factors involves how severe the late payment is, including how far it is “past due” and how recently the missed payment or late payment occurred. If the late payment occurred several years ago, its effect may be much less severe than a late payment that occurred more recently.

How long negative information stays on a borrower’s credit report is governed by the Fair Credit Reporting Act (FCRA). For most purposes, late payments will stay on a person’s credit report for up to seven years, although exceptions do exist to that rule.

Bankruptcy Law, Credit Card Debt, Debt Relief

Tips for Negotiating with Debt Collectors

Posted on March 20, 2019by Admin

Working with a debt collector is normally not a pleasant experience. Debt collectors are persistent when trying to reach a debtor, and many will stop at nothing until they are successful at getting payment. Any time someone is late on or has missed a payment, that person should expect some type of communication from a collector, whether it be in written form or through phone calls. Many times, it is a combination of both. It helps to know your rights when dealing with a debt collector and know how to work with them on negotiating your debt.

Get Verification of the Amount Owed

Never assume that the information the debt collector is providing is completely accurate. Believe it or not, many scams are out there where debt collectors attempt to collect on debt that belongs to another person or is entirely past the statute of limitations. As soon as the debt collector makes contact, ask them to provide written verification of the amount owed.

Also, verify the credibility of the debt collector. Ask for the person’s name, the name of the company, a business address and a phone number. It pays to do some research into the company to see if they are, in fact, a legitimate debt collector. Also, review the amount they say is owed against your own records to ensure that the amount is accurate. Collection agencies are bound by law to send a validation letter within five days of contacting a debtor, listing the debt amount, the original creditor, and what the debtor should do in the event an error is discovered. It could be possible that a debtor owes on a specific debt but in a smaller amount than the collector is arguing they owe. Always verify before making payment.

Debtor Rights

One big mistake many debtors make is assuming that they have no rights when speaking with a debt collector, which is very far from the truth. Because many times, a debt collector’s actions will border on the edge of harassment or threats, the Fair Debt Collection Practices Act, or FDCPA, was enacted, which prohibits a debt collector from deceiving, threatening or harassing a debtor while collecting on a debt. The FDCPA prohibits any type of communication that threatens the debtor, includes profane language, or makes the debtor feel harassed. The collector can also not lie to the debtor, threaten to arrest or deport him or her, or threaten to take the person to court without any intention of doing so. A debt collector is also prohibited in the times that he or she can contact a debtor. Calls cannot be made before 8 a.m. or after 9 p.m. If a debt collector is violating the FDCPA, inform them of the violation and demand that no more communication be made. The collector can be reported to the Consumer Financial Protection Bureau, as well as the Better Business Bureau and the Florida Attorney General.

Look at the Type of Debt

It also helps to know what type of debt is involved when dealing with a collector. Many times, different options exist for payment plans based on the type of debt, whether it be credit card, medical debt, or something secured with collateral, like a car or home. Medical debt creditors tend to be more willing to work out a payment plan than credit card creditors. Also, if the debt involved is a medical debt, double check to make sure that the debt was processed by insurance first. Student loan service providers may also be more likely to work with a debtor on an income-based repayment plan or even may offer a deferment option to allow the debtor to get back on his or her feet first before continuing payment.

Some collectors will work with a debtor on a lump sum payment that is lower than the amount owed in exchange for releasing the debt. Ask if that is a possibility on the balance, and if it is, see if the collector will settle for a partial repayment over receiving nothing.

Be Aware of the Statute of Limitations

As mentioned previously, debt collectors will also try to get a person to pay on a debt that is past the state’s statute of limitations. It is highly possible that a phone call from a debt collector is on a debt that is past the time frame in which they have a legal right to pursue payment. The statute of limitations for Florida is five years for written contracts and four years for oral contracts or revolving accounts, such as credit cards.

Use the “Bankruptcy” Word

Sometimes it does benefit the debtor to mention that he or she is considering filing for bankruptcy. The collector wants to receive payment, and if the debt is something that is unsecured, such as a credit card or medical debt, it could easily be discharged through bankruptcy. If this happens, the creditor will end up receiving nothing. Tell the collector that bankruptcy is being considered not as a threat necessarily but more as a push to motivate them to negotiate. However, only do this if repayment in any form is an actual possibility. Otherwise you could be making empty threats.

Always Get It in Writing

When dealing with debt collectors, any time someone works out an agreement with the collector, it is imperative that he or she memorialize the agreement in writing. This rule of thumb applies for whatever type of agreement is reached, whether it be a debt repayment plan, a change in payment terms, or a lower interest rate. Request that the agreement be sent via mail, and always review the terms very carefully before signing on the dotted line. Make sure nothing has changed from what was originally discussed. Many times, a debt collector may add some additional language that was not agreed upon, and once the contract is signed, the debtor is bound by that agreement. Always review before signing.

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Bankruptcy Law, Credit, Credit Card Debt, Debt Relief, Timothy Kingcade Posts

70 Percent of Americans with Credit Card Debt Admit They Cannot Afford to Pay it Off in One Year

Posted on March 19, 2019by Admin

Credit card debt is a major problem for many Americans. Almost half of all Americans currently carry a balance on their credit cards, but the problem is, most of them are not able to pay off the balance. In fact, 70 percent of cardholders say they cannot pay off the balance within one year.

These figures come from a survey released by real estate data company, Clever. They surveyed 1,000 credit card users regarding their credit card use. The study found that 47 percent of all Americans carry a monthly balance on their credit cards. On top of that, 70 percent of those surveyed say that their card balance is more than $1,000.

Additionally, 56 percent of those surveyed said that they have had their credit card debt for at least one year. Of those surveyed, 20 percent of them say they believe it will take them over three years to pay off the debt. Eight percent of them admit that they do not know when they will be able to pay off the debt.

Depending on how high the balance is, the interest rate on the card can make it virtually impossible to ever make progress on the debt. The average credit card APR currently is 17.65 percent. If a cardholder is only making the minimum monthly payment, he or she is likely only paying on the interest for the card.

Credit card debt has hit an all-time high, according to data from the Federal Reserve. As of December 2018, U.S. credit card debt was estimated at $870 billion, which is the highest it has ever been. Credit card balances were also said to have increased by $26 billion from the prior quarter, which is another notable increase.

What seems to be making this problem worse is the fact that Americans rely heavily upon debt to cover everyday expenses. Even something as simple as buying groceries or paying for gas for their cars can add up if charged on a credit card. In fact, the Clever survey reported that 28 percent of them say that they rely on credit cards to pay for their essential living expenses.

It is no secret that credit card usage has gone up in recent years. It is estimated that currently 480 million credit cards are in circulation nationwide. 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. We offer additional tips for eliminating credit card debt on our blog.

Click here to read more on this story.

Bankruptcy Law, Credit Card Debt, Debt Relief, Timothy Kingcade Posts

Understanding the Benefits and Disadvantages of Utilizing Balance Transfers

Posted on March 8, 2019by Admin

Credit card debt can be difficult to manage, especially if a card carries a particularly high interest rate. If someone is only paying the minimum monthly payment, it is likely he or she is only paying on the interest accrued that month and never making progress on the principal. One possible option to pay down a high credit card balance is to transfer the balance to a credit card with a zero or lower interest rate. However, balance transfers come with their own set of risks, as well as benefits, which should be explored before someone chooses to pursue this option.

A balance transfer occurs when the outstanding credit card balance from one card is transferred to another one. This transfer is normally done because the new card offers a lower interest rate. Many cards even offer promotional periods of zero percent interest. The purpose of transferring the balance is this period with no interest accruing should give the debtor time to pay down or even completely pay off the balance. It is a simple solution to a complicated problem.

Many cardholders choose to utilize balance transfers if they hold several balances on multiple credit cards. They feel like they are juggling the minimum monthly payments on each card without ever truly making progress. By taking all these balances and transferring them into one card, it can be a way to consolidate debt and make payments easier. After the transfer, the debtor will only have one card to pay rather than multiple cards.

Balance transfers come with their own set of disadvantages and risks, however. Many times, the costs grossly outweigh the benefits of the transfer. Any of these promotional low rates come with a set time limit before the interest spikes back to a rate that may be even higher than the original card. Some of the cards also come with fees and penalties if the balance is not paid before the promotional period expires. If the consumer is not careful, he or she may end up not only with a rate higher than previously held but also zero progress made on the balance.

Some consumers make the mistake of transferring a balance to a new card and making payments while still using the card. If any progress is going to be made on the balance, it helps to not use the card and add to the balance. However, if the person relies on a credit card for daily expenses, it may be wise to use a different card while paying on the card with the balance transfer.

When a consumer applies for a new credit card, the cardholder should expect a hit to his or her credit score, as well. It may not be a significant drop, but it could be if the cardholder already has a poor credit rating. If the balance is not paid off at the end of the promotional period, the cardholder could end up with a card with a high balance and a bad credit score, thus negating the whole point of the balance transfer. It is for this reason the consumer should be sure that he or she can handle making large payments on the balance after the transfer is made. Do not apply for a balance transfer if you do not believe you are up for the challenge of paying down the debt.

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Credit Card Debt, Debt Relief, Timothy Kingcade Posts

Help for Florida Seniors Struggling with Credit Card Debt

Posted on March 7, 2019by Admin

Credit card debt is increasing when it comes to individuals over the age of 65, according to a recent study. Many seniors are carrying this credit card debt into retirement. Medical debt can compound the problem. When seniors face health issues, putting the additional out of pocket costs not covered by their insurance can be tempting. In fact, medical debt is the leading cause behind U.S. bankruptcy filings today.

According to a 2018 report from the Employee Benefit Research Institute, approximately 42 percent of all houses where the head of household is between the ages of 65 and 74 carried credit card debt. This figure is a 10 percent increase from 1992 to 2016. When it comes to individuals over 75 years of age, 26 percent of them carry credit card debt, which is a six percent increase from 1992 to 2016.

According to the research associate who conducted the study, usually the median debt amount decreases when an increase is seen in the percentage of homes carrying credit card debt. For senior citizens, however, the increase is seen both in how many have credit card debt and how much debt they carry, which leads many to question why the increase has occurred.

Many different reasons can be attributed as to why credit card debt is rising amongst seniors. One reason is the fact that seniors are relying on a fixed income following retirement. For many, this income is just enough to pay for necessary living expenses, but if any increase in these expenses occurs or if the senior has a medical or unexpected financial emergency, his or her income may not be enough to meet the expense.

Additionally, many seniors come to the Miami area to retire, but they do not anticipate the higher cost of living. When they are already on a tight budget, they will resort to credit cards to keep up with extra expenses. However, problems arise when they are not able to pay the balance from these expenses from month to month. Health insurance and medical costs can also be an extreme burden for aging Floridians. The result of this is many of these senior citizens are carrying debt into retirement.

This fixed income can be a combination of pension, other retirement funds and Social Security. It is estimated that approximately 21 percent of married couples and 44 percent of single adults currently rely on Social Security for 90 percent or more of their income. With the average Social Security check being $1,413, this does not leave much wiggle room. It only takes one financial crisis for that person’s entire financial situation to implode.

Several different steps can be taken to help a senior who is struggling with credit card debt get out of his or her situation. The worst thing that a person can do is to ignore the debt in hopes that it will go away. Debt collectors are persistent when trying to get payment on a debt, and they do not discriminate based on the age of the debtor. Ignoring the debt will also lead to higher interest rates, fees and penalties that can make the situation even worse.

If a senior citizen finds that he or she is not able to pay on a debt, many of these credit companies will work with the debtor on a payment plan or settlement on the debt. The cardholder is within his or her rights to work directly with the creditor on a mutually-beneficial resolution, including a settlement on the debt or a lower payment.

Of course, bankruptcy is always a viable option depending on the situation. A person can spend years struggling with medical and credit card debt that would otherwise be eliminated in a Chapter 7 bankruptcy case. Someone’s age should not be a deterrent if bankruptcy is the best option for him or her. A bankruptcy attorney can meet with the individual free of charge to discuss his or her financial situation and determine the best path forward.

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Related Resource:

https://www.nerdwallet.com/blog/credit-cards/seniors-credit-card-debt/

Credit Card Debt, Debt Relief

National Credit Card Debt Hits Record High at $870 Billion

Posted on March 6, 2019by Admin

It is no secret that credit card usage has gone up in recent years. It is estimated that currently 480 million credit cards are in circulation nationwide. The increase reported as of December 2018 is to be expected to an extent, given the fact that credit card usage does go up during the holidays. However, it is still significant that this marks the first time that credit card balances have reached the levels they were at during the height of the 2008 recession.

When it comes to national consumer debt, credit cards come in fourth, behind mortgages, student loan debt and car loans. However, when compared to these other categories of debt, credit card usage has increased significantly more.

The number of credit card delinquencies has also increased. At the end of 2018, 37 million credit card accounts were more than 90 days delinquent. These numbers are up two million from the end of 2017. It was reported by the Federal Reserve that these 37 million credit card accounts add up to over $68 billion of debt that is more than 90-days past due.

Americans over the age of 60 hold a significant portion of this credit card debt. This group accounts for approximately 30 percent of the total credit card debt reported. It is a problem that is becoming more widespread, especially in the Miami area, as more of these seniors are struggling to keep up with daily expenses while living on a fixed income.

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. We offer additional tips for eliminating credit card debt on our blog.

Please click here to read more.

Related Resources:

https://www.bloomberg.com/news/articles/2019-03-05/u-s-credit-card-debt-closed-2018-at-a-record-870-billion

Credit Card Debt, Debt Relief, Timothy Kingcade Posts

Millennials Are Struggling the Most to Pay Off Credit Card Debt

Posted on March 1, 2019by Admin

Credit cards can be an excellent way to establish credit and pay for expenses, so long as the balance stays low and bills remain paid. However, if the balance gets out of hand, it can be very difficult to keep up with even a minimum monthly payment. According to CreditCards.com, Millennials, individuals between the ages of 23 and 38, are running into this exact problem when it comes to their credit card debt.

According to a new poll published by CreditCards.com, one in four millennials say that they have been carrying a credit card balance for at least one year. One in ten of millennials surveyed said they have been carrying a credit card balance for over five years with no end in sight.

Depending on how high the balance is, it can be very difficult to pay off the total amount due. Most monthly minimum payments only end up paying the interest owed from month-to-month. With the average credit card APR at 17.57 percent, it is easy to see how making progress on paying down the principal on the card can be an uphill battle. No matter how hard the person tries, the only progress he or she will make by paying the minimum payment or a small amount above that set payment will be on interest and possibly very little part of the principal.

The average American household has $5,700 in credit card debt. For individuals under the age of 35, that amount is $5,808. It can be very difficult to ever see an end to that balance when only making the minimum monthly payments. When all is said and done, you can end up paying double that balance in interest alone.

Of those millennials surveyed, most said that their credit card debt was from day-to-day expenses, including food, gas, utilities and child care. Others reported that their large balances were a result unexpected car repairs or medical expenses. Unlike previous generations, these young consumers are already struggling in paying other debt, mainly student loans. With the average student graduating from college with $37,000 in student loan debt, most of their paycheck goes to paying for housing and their student loan payments. With less money to put towards other expenses, they may rely heavily on credit cards, but when those balances get too high, they simply do not have the income left to pay off the large balance.

One positive piece of news is the fact that many millennials are already aware of the fact that credit card debt is a big problem. Many are choosing to not take on a credit cards or are spending less on extraneous expenses

While it requires discipline on the part of the consumer, financial experts recommend that an emergency savings fund be built up for these types of situations. Most recommend that you have at least three months of living expenses set aside in a savings account for emergencies. These accounts can be built up over time by you taking a small percentage of your paycheck monthly and depositing it directly into a savings account. That way, the money comes out immediately and the account is able to grow.

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