According to a survey from Bankrate, it isn’t uncommon for Americans who are worth between $100,000 and $199,999 to carry credit card debt. Specifically, it found that 57% of those individuals are likely to owe money to credit card companies. This compares to 42% of others in North Carolina and throughout the United States. Individuals who make more per year may have greater access to credit, which means that they may be more tempted to use it.
It is also possible that individuals have a majority of their net worth tied to their homes or other assets that aren’t liquid. Therefore, they have to use credit cards to pay everyday expenses or cover other costs that they incur. However, as a person’s net worth increases, the likelihood that he or she carries credit card debt tends to decrease. Those who are worth more than $1 million tend to be the least likely to have such debt.
Typically, credit cards charge interest rates between 17 and 25%, which is higher than what a person could earn from a brokerage account. Therefore, it is generally a good idea to pay down credit card debt as quickly as possible. Doing so may be even more advantageous for those who are trying to put their kids through college or take care of their parents.
Those who are struggling to pay their credit card bills may want to consider filing for either Chapter 7 or Chapter 13 bankruptcy. It may also be possible to pursue credit card debt relief by working directly with a credit card company. An attorney may help an individual pursue either option. If an individual does obtain debt relief from a creditor, the amount forgiven may be treated as taxable income for the debtor.