The Federal Reserve recently released statistics that reflect an increase in confidence regarding the economy. That is good news for Florida residents and others around the country. With greater confidence, many consumers are more willing to spend money. However, this may create problems for some if credit cards are used to make purchases. If balances are not paid in full, credit card debt can quickly become a burden.
Reports show that the national credit card debt now exceeds $1 trillion, which is a record level for the country. The latest numbers show that overall consumer borrowing had the largest monthly increase in over two years. While the increases are positive for the economy, experts worry that many may overextend themselves. With interest rates at high levels, there is concern than consumers will be unable to break the cycle of credit card debt.
Financial advisers urge consumers to examine their financial situation and take action. It is helpful to fully understand what the true costs of the credit cards are, including balance owed, minimum payments and interest rates. Some may have success in asking a credit card company to reduce the interest rates being charged. Others may choose to transfer their balances to a zero-interest rate.
Industry experts often discuss two options for reducing credit card debt. The avalanche method focuses on paying off the card with the highest interest rate first. With the snowball method, the smallest card balance is paid off first, typically giving the consumer encouragement. Regardless of the method, it is critical to have consistency in executing the plan.
Dealing with hefty credit card debt may seem insurmountable at first. However, a Florida bankruptcy lawyer can help someone develop a plan that can help reduce or eliminate that debt. A trusted attorney will work with clients to help improve their financial situations.
Source: USA Today, “Personal debt: Why now is a critical time to pay off credit cards“, Sarah Skidmore Sell, Feb. 3, 2018