Credit card debt haunts many Texans. Oftentimes individuals have to turn these lines of credit in order to make ends meet simply because their wages aren’t enough to support them. In other situations, credit cards must be utilized to pay off unexpected medical debt. Others hope to use them as a mere stopgap measure to get them through to their next paycheck. Regardless of why an individual possesses credit card debt, the stark reality is that it can pose a threat to one’s future financial stability.
This may be especially true if a recession strikes any time soon. According to reports, credit card interest rates are already at near all-time highs, with the national average settling at 17.61%. This is up significantly from the 13% seen at the start of the Great Recession. Although this may not seem like much of a difference, the fact of the matter is that it can mean thousands in interest costs over the life of a balance with repayment periods that extend for several years more than initially anticipated. Repaying these balances can be even more challenging during a recession when jobs are lost and wages decrease.
Making matters worse is the fact that only 35% of Americans have an emergency fund that is significant enough to cover three months of their expenses. More than a quarter of Americans don’t have any emergency savings at all. For those in the latter category especially, a sudden unexpected bill can leave them turning to high interest credit cards that are all but impossible to pay off when making minimum payments.
Instead of struggling for years to repay these debts, those struck hard by credit card balances can seek true debt relief in the form of bankruptcy. Chapter 7 bankruptcy is a great way for many Texans to eliminate credit card debt and secure a new financial start. Deciding whether bankruptcy is right under the circumstances can be tough, though, which is why it is often wise to discuss these matters with a qualified legal professional who can provide competent guidance.