Tag: credit card debt

Credit Card Debt

Cities with the Most Credit Card Debt

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The average person has more than four different credit cards in their wallet, according to WalletHub’s proprietary data. People in some cities have more cards than others. The average in the top cities being over six cards per person. To determine the cities where credit card ownership is increasing the most, WalletHub analyzed the latest consumer-finance data across four key metrics. These metrics measured the average number of credit cards owned per person and average number of new cards opened per person in Q4 2023, as well as the percent change in both of those numbers from Q4 2022.

In total, Americans have over $1.2 trillion in credit card debt as of Sept. 30, 2023. Miami ranked No. 1, with an estimated payoff time of nearly 111 months — over nine years on average. Some of the reasons for the enormous timeline are the city’s high median credit card debt ($3,106) and relatively low median earnings for workers ($38,823), researchers explain. Several other Florida cities ranked near the top of the list for the least sustainable credit card debt, including Port St. Lucie (No. 4), Cape Coral (No. 5) and Tallahassee (No. 10).

If a person is struggling with credit card debt and is unsure of which route to take, it is always best to consult a legal professional to discuss his or her options. An attorney can look at the person’s situation and can advise him or her on whether bankruptcy is appropriate or whether other options are best.

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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Sources:

Cities with the Most Credit Cards (wallethub.com)

Cities with the least sustainable credit card debt (wallethub.com)

Credit Card Debt, Debt Settlement

Why Debt Settlement Is the Wrong Way to Go When Dealing with High Credit Card Debt

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When someone is struggling with high credit card debt, it can be easy to take any offer that promises to eliminate that debt. This is why so many debt settlement companies exist. These companies are often referred to as “debt relief” or “debt adjusting” companies, and their claim is they can negotiate directly with the consumer’s creditors to reduce the amount he or she owes. However, when it comes to dealing with high credit card debt, working with a debt settlement company is not always the best plan.

During the debt settlement process, the consumer will stop making payments on his or her credit card debt in hopes that his or her creditors will settle for less than what is owed and will negotiate with the debt settlement company. The problem is, creditors are not bound to work with the debt settlement company, and this process can often take years to complete.

Credit Card Debt

Can Credit Card Debt Be Written Off?

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According to the U.S. Government Accountability Office, the amount of credit card debt consumers face has reached a record high with consumers owing more than $1 trillion to credit card companies. It comes as no surprise that many people are looking for ways to escape their debt, if at all possible, which leads one to the question: is it possible to get credit card debt written off?

The answer is yes, but it is not a simple yes. The process can involve negotiations with credit card companies or debt collection agencies or even legal proceedings.

Credit Card Debt

Ways to Avoid Christmas Credit Card Debt

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It can be easy to fall deeper into debt during the holiday season. Those celebrating the holidays are four times more likely to expect to spend the most money on gifts for family and friends (80%) compared to dining out (21%), social events (20%), travel (17%) and holiday decorations (16%) this year.

According to a survey by investment bank D.A. Davidson, 40 percent of American consumers are starting the holiday season with more credit card debt than they did a year ago, and 48 percent of them will end the holiday with even more debt. The fact that average credit card interest rates are at an all-time high doesn’t help.

Credit Card Debt

U.S. Debt Levels Are on the Rise as More Americans Fall Behind on Their Credit Cards

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American consumers are adding more to their credit card balances and falling behind on current payments, according to data from the Federal Reserve Bank of New York’s latest Quarterly Report on Household Debt and Credit.

According to this report, credit card balances hit a high of $1.08 trillion, increasing $48 billion from the previous quarter and increasing a record $154 billion from the previous year. This year-over-year increase is the largest one seen since the New York Fed began tracking this data back in 1999.

Credit Card Debt

Four Ways to Get out of Credit Card Debt

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Credit cards are among the most expensive ways to borrow- especially these days. The Federal Reserve’s war on inflation, marked by interest rate hikes, has lifted credit card rates to record highs. According to a recent NerdWallet American Household Credit Card Debt Study, the average amount of revolving credit card debt owed per American household is $7,486. Getting out of this debt can be difficult, but it is not impossible with proper planning. The following strategies are proven to be successful when getting out of credit card debt.

Determine a Payment Strategy

The first step to paying down credit card debt is to determine what type of payment strategy would work best for the consumer.  Paying more than the minimum monthly payment posted is always the best place to start since the monthly minimum payment is normally only two percent of the balance and pays more for interest accrued every month than the principal owed.

Credit Card Debt

How to Respond If You Are Sued for Credit Card Debt

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Most consumers utilize a credit card at some point in their lives, and many of them carry credit card debt from month-to-month. The amount of credit card debt carried by consumers is growing. It is estimated that around 23.5 percent of all Americans struggle with some type of debt in collections status, according to the Consumer Financial Protection Bureau (CFPB), and much of this debt involves credit card debt. If a consumer is on the receiving end of a collections lawsuit for credit card debt, it is important to know how to respond.

A collections lawsuit can vary, depending on the jurisdiction, but, the steps are all fairly uniform. The first thing to expect is the consumer will receive a complaint filed in civil court, along with a summons. This summons should contain a number of important pieces of information including who is suing the consumer, whether any additional co-defendants are a part of the lawsuit, how much money the creditor is attempting to seek, which can include the balance owed, along with interest fees and legal fees, the date of the hearing, and how to file a formal answer or response to the complaint.

Credit Card Debt

Credit Card Study Reports These States Have the Highest Credit Card Debt Increases

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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.

Consumer News, Credit Card Debt

Credit Card and Car Loan Defaults Hit 10-Year High

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A number of consumers are defaulting on their credit cards and car loans to the point where the number of defaults reported are the highest seen since the financial crisis. With inflation not nearing an end any time soon and interest rates continuing to rise, the number of consumers defaulting is expected to grow.

This information comes from data provided by the credit agency, Equifax. The agency found that credit card delinquencies have hit 3.8 percent while car loan defaults have hit 3.6 percent. These figures are the highest ones seen in more than 10 years.

Credit Card Debt

Credit Card Debt Tops $1 Trillion

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Total credit card debt reached $1.03 trillion in the second quarter of 2023, according to the Federal Reserve Bank of New York.  That’s a 5% increase, or about $45 billion in consumer credit card debt. With student loan payments resuming in the fall, this can present challenges for borrowers going forward.

Not only are credit card balances higher, but more cardholders are also carrying debt from month-to-month, according to a separate Bankrate report, adding to the financial stress. Another rate hike by the Federal Reserve, which occurred last month, made the average credit card rate over 20%.