Lefkovitz & Lefkovitz
Nashville Office 615-686-2279 Cookeville Office 931-400-2218
Serving all of Middle Tennessee's Bankruptcy Needs

Holding on to credit card debt means losing money on interest

Tennessee residents may know that credit card debt is a problem for many people. Big balances combined with high-interest rates can lead to financial difficulties, especially if a sudden illness or job loss should arise. On average, Americans carry over $5,000 in credit card debt. For people between the ages of 35 and 64, the average credit card debt is even higher. A big part of the problem is interest, which is wasted money when credit card balances remain high for long periods.

According to data from ValuePenguin, more than 38 percent of households in America have credit card debt. The youngest and oldest adults tend to carry the least debt while middle-aged people have the most. Experts speculate that this could be in part due to the costs of parents sending their children to college. People in higher income brackets may have even more credit card debt, with the average for households that earn $160,00 per year or more having about $11,200 in debt.

Interest rates for credit cards fluctuate. The average credit card interest rate since 2005 is between 12 percent and 16 percent. An average household with $5,700 in credit card debt could be paying almost $500 a year in interest or more if the balance is not paid off for several years. Experts advise paying off credit card debt as soon as possible to avoid paying large amounts of interest.

Someone who is overwhelmed by debt could find relief and get a fresh financial start by filing for bankruptcy. Someone who is working and wants to pay off their debts on an affordable payment plan could file for chapter 13 bankruptcy. This type of bankruptcy calls for repayment for a period of time, after which remaining debt is dismissed.

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