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Economic recovery may just mean more credit card debt

For any Chattanooga resident who has had to deal with unexpected expenses, unemployment or just couldn't make ends meet, is likely familiar with using a credit card to pay the bills. Unfortunately for many, credit card debt just seems to add up more and more and, eventually, it could become too much to deal with.

This appears to be the case for many people these days, and it may be what is driving the alleged "economic recovery." Total new credit card debt is on pace to be near $47 billion this year alone, which means from 2011-2013 new credit card debt is near $130 billion. While it's true that consumers have been able to pay down nearly $32.5 billion on existing credit card debt in the first quarter of 2013, the numbers are still staggeringly high. Compared to the first quarter of 2012, Americans have actually paid back 7 percent less this year. This means that people are still using credit cards for expenses at a very high rate.

It is likely that those numbers mean more people will be having problems paying back those cards soon. Making only the minimum payments or making delinquent payments results in high interest rates and, ultimately, makes it almost impossible for a consumer to get out of debt without help. One of the few ways to take care of those financial challenges is filing for bankruptcy. A bankruptcy allows the consumer to get rid of the credit card debt and get a fresh start. Once the consumer receives a discharge, the debt is gone and the consumer is free to focus on more important debts, such as their home and car.

Getting a fresh start from credit card debt is often a difficult process, even for people who are financially intelligent. Oftentimes getting more information is required in order to get out from under that burden.

Source: North Fulton, "Economic recovery could be funded by credit card debt," Christopher Freiberg, June 24, 2013

Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-954-7180
Phone: 423-624-4002
Fax: 423-624-0509
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