A new study shows some alarming statistics related to consumer credit card debt. Wisconsin residents may be surprised by the numbers, but they can find help in some tips that accompanied the study.
The study, conducted by CardHub.com, shows that the amount of new debt acquired in the second quarter of 2013 was over $17 billion. This cancels out over 50 percent of the debt paid off in the first quarter of the year. This amount of new debt is 75 percent higher than the same period three years ago. The site says that the increase in the second quarter is normal, as tax refunds and bonuses that accompany the first quarter are no longer coming in. Another alarming statistic is that over $250 billion has been written off as a loss by lenders in the last four years.
In addition to these new statistics, CardHub also offers techniques for consumers to manage better their debts. First is to make a realistic budget that makes sense, all the while building an emergency fund for when unexpected problems crop up. Keeping different transactions on different cards is another technique. The site also recommends applying the largest portion of debt payments to the card or debt with the highest interest rates. Lastly, it is recommended that consumers be realistic and budget around their current job situation, rather than for an aspirational amount of income.
Sometimes, even the best planning and budgeting cannot get consumers out of crushing debt. If someone’s debt far exceeds their income, bankruptcy may be the only way to get ahead. An attorney who is familiar with credit card debt cases may be able to help with filing for bankruptcy to eliminate the credit card debt.
Source: WWLP, “Credit Card Debt study”, David McKay, September 10, 2013