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Credit card debt is on the rise

On Behalf of | Oct 29, 2019 | Chapter 13 Bankruptcy |

Many Virginia consumers struggle to make ends meet. They may rely on credit cards to cover expenses, and the result is a growing amount of debt. At the end of 2018, people across the country owed around $900 billion in credit card debt. This marks an upswing from 10 years before, when Americans owed $792 billion to credit card companies. According to the Consumer Financial Protection Bureau, people owe major cards like Visa, Mastercard and American Express $793 billion, while they owe $91 billion to retailers with their own credit cards.

The report noted that the largest amount of credit card debt is held by people with high credit scores, which means that they continue to be able to pay their bills and potentially pay off their debt each month. At the same time, consumers with lower credit scores have also increased their debt burdens. Of course, credit scores can change rapidly if people face hard times and are no longer able to pay off their cards. Indeed, over the past two years, charge-off rates and late payments have increased significantly.

More people seem to be looking for relief from their credit card debt. The number of accounts settled through some form of debt settlement has grown since 2017, indicating that many people face difficulties dealing with their balances. If there is an economic downturn, many more people may find it harder to keep their bills in check.

A number of people wind up using credit cards to cover mandatory expenses, and hefty interest rates can make them feel like there is no escape. People who are unable to pay their bills can consult with an attorney about how Chapter 13 bankruptcy can lead to debt relief.