Out of control spending isn't driving most credit card debt
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When it comes to credit card debt, there are three common categories of consumer. The first are those people who don’t want credit card debt and refuse to carry any. The second are those who have credit card debt, but have everything under control. The final category includes consumers who have credit card debt that is out of control. If you’re in the latter group, you may be stressed, wondering where to turn, and certain that there’s no way out of your financial quagmire.
If you’re drowning in unmanageable credit card debt, you should know that reckless spending is not likely what caused your financial nightmare. It’s rarely extravagance in spending that leads to overwhelming credit card debt. A new study showed that most credit card debt is not the product of bad financial habits, but circumstances beyond your control. Take a look at the latest research to get a better perspective.
What the study found
A recent study by Comparecards found that 42% of Americans attribute their credit card debt to trying to make end meets, not on wild spending. The site surveyed 1,000 consumers that carry credit card debt month-to-month and can’t afford to pay their debt in full. Roughly 29% of survey respondents blamed their debt on car repairs while 27% of study participants reported medical bills were the primary cause of their credit card debt.
The survey focused on the key causes of excessive credit card debt and associated stress levels. The Comparecards survey shows these insights on those struggling to pay their credit card debt:
- Of those that carry credit card debt month-to-month, the average balance is nearly $6k.
- Younger consumers are more stressed about credit card debt.
- 86% of millennials are stressed out by their credit card debt while just 72% of those 35 plus have credit card debt anxiety.
- Nearly 30% of survey participants had at least two credit cards they can’t afford to pay in full.
Baby boomers vs. Millennials on debt
Of the demographics surveyed, baby boomers are more likely than millennials to carry credit card debt month-to-month and need longer to pay off their balances. Nearly 50% of boomers surveyed need at least a year to pay off their debt while just 28% of millennials need that long.
Credit card debt solutions
For those heading into retirement, debt can be catastrophic. Fortunately, there are solutions to deal with credit card debt and get you back on solid financial footing. If your credit card debt is out of control, and unaffordable medical bills and other unsecured debts are weighing you down, it might be time to consider North Carolina bankruptcy. Which type of bankruptcy is best for you depends on what assets you own, how much equity you have in them, your income, and financial goals.
Some debt relief companies promise to wipe out your debt, but these services can be costly and unpredictable. In contrast, NC bankruptcy offers known outcomes that can be life-changing and get you back on track financially. Chapter 7 wipes out all your credit card debt, medical bills, some qualified older income taxes, and signature loans. Chapter 13 puts you on a repayment plan to catch up on secured debt while also discharging unsecured debt to some extent.
Chapter 7 bankruptcy relief is sweeping but you must earn less than the median income or pass a Means Test to prove you can’t afford your debt on your current income. Chapter 13 allows you to more fully protect assets and requires a commitment of three to five years for the repayment plan. To find out if bankruptcy is a good fit for your debt dilemma, contact the Law Offices of John T. Orcutt. Read reviews from satisfied clients then call +1-919-646-2654 for a free North Carolina bankruptcy consultation at one of our convenient locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.