Several financial experts have predicted that the U.S. Federal Reserve’s decision to raise interest rates on Dec. 14 may be a signal that the era of historically low borrowing costs is drawing to a close. While the modest quarter point increase may not be a cause of immediate concern for most Tennessee residents, many analysts expect rates to continue their upward trajectory for some time.
The announcement that interest rates would be going up comes at a time when American families are taking on more and more debt. A study reveals that the average U.S. household now owes about $132,500, and an alarming $16,000 of this figure is made up of revolving debt. Fast and relatively easy credit generally comes at a high price, and another survey shows that Americans pay an average of 15.2 percent interest for the convenience of paying with plastic.
Total household credit card debt in the United States is expected to reach $842 billion by 2019, and many families are turning to credit cards due to soaring health care expenses. Increases in medical costs have outstripped wage gains by 29 percent since 2003, and individuals and families across the country are now relying on their credit cards to pay for food and other necessities. While stagnant wages and rising interest rates may be bad news for consumers, financial analysts predict that the years ahead will be lucrative for debt collectors and subprime lenders.
Creditors are rarely happy when people who are struggling to make ends meet file personal bankruptcies, and many myths have sprung up about how taking this step can have long-term and catastrophic consequences. Attorneys with debt relief experience could dispel these misconceptions and explain how those with unmanageable debt may actually find it easier to borrow after their bankruptcy proceedings have been concluded. A Chapter 7 or Chapter 13 filing also prevents bill collectors from harassing debtors and provides a path to a fresh financial start.