A recent survey reveals that revolving debt in Virginia grew by more than $1 billion during the second quarter of 2019 and has now reached a worrying $31 billion. The average Virginia household owes $10,480 to credit card companies, which is a figure that is only surpassed in Alaska and Hawaii. The personal finance website WalletHub based the survey on data provided by TransUnion and the U.S. Federal Reserve.
Many consumers turn to credit cards to cover unexpected expenses like car repairs or medical bills, but a growing number of Americans are becoming reliant on revolving debt to pay their day-to-day living expenses. This worries experts as credit cards tend to charge higher rates of interest and the balances can be extremely difficult to pay off. According to a report released by CreditCards.com, about 39 million Americans are carrying credit card balances that are two or more years old.
The CreditCards.com study also reveals that about 28% of Americans use their credit cards to cover monthly expenses like food and utility bills. This suggests that more than a quarter of the country’s consumers have no choice but to resort to high-cost borrowing to make ends meet. According to the personal finance company Bankrate, 29% of Americans owe more to credit card companies than they have in their savings and retirement accounts.
The revolving debt trap is so easy to fall into because credit cards are so simple to use. Escaping it is far more difficult because lenders often charge fees and raise interest rates after just one late payment. Bankruptcy provides American with an escape from overwhelming bills, but many consumers are reluctant to take this path because of the many myths surrounding debt relief. Attorneys with experience in this area may dispel these myths and explain how filing a Chapter 7 or Chapter 13 bankruptcy puts at least a temporary end to harassment from debt collectors and offers the possibility of a fresh start.