Credit card debt is a worry for North Carolina residents and people across the United States. Since making ends meet can be difficult, people are frequently using their credit cards to bridge gaps and make necessary purchases. In other instances, people spend beyond their means and find themselves in financial trouble. Research shows how prevalent this is.
According to a study from the Consumer Finance Protection Bureau, 55% of credit card balances have revolved for two years or longer. The study also found that 82% of outstanding balances have been allowed to revolve for at least a month or more. When a balance is allowed to linger on a credit card, it is referred to as zombie debt.
Financial challenges face many North Carolina residents, with unemployment and unexpected expenses as two of the more typical reasons why people find themselves with significant credit card debt and barely able to make the minimum monthly payments. When even that becomes too much, it's not long before creditors start calling and sending demand letters. When there is simply no money to pay the debt, it is understandable to try and ignore the problem, but that will only serve to make matters worse. Debt collectors can and often do file lawsuits, and it's important to respond if that happens.
Throughout North Carolina and the rest of the United States, one out of every five American consumers do not know if they owe money on their credit card. Three out of every 10 Americans have no knowledge regarding the interest rates on their lines of credit. In a new online survey, 24% of the participants owed money in excess of $10,000 while 21% of the consumers did not have a clue as to whether they even had any debt.
The profile of credit card debt is changing for many young people in North Carolina. Millennials were once known for their aversion to overdue bills, especially as many of them became adults and entered the workforce during the 2008 financial crisis. As a result, many of them steered clear of credit cards. However, as millennials' salaries have grown and card issuers have developed new offers that are particularly appealing to younger people, they have taken on a growing burden of debt.
Consumers throughout the country owe more than $1 trillion in credit card debt. While an increase in credit card debt may be good for the economy as a whole, it isn't necessarily a good thing on a personal level. However, there are ways that a North Carolina resident can reduce or eliminate credit card debt balances. These strategies are called the snowball and the avalanche methods.
As of February 2019, consumer debt in the United States totaled $4.05 trillion. Individuals in North Carolina and throughout the country saw their revolving debt increase by $35.4 billion while consumer debt increased by $31.4 billion in January 2019. Non-revolving debt increased by $148.6 billion in February, which was lower than the increase seen during the previous month. Revolving debt generally means credit card debt while non-revolving debt generally refers to auto and student loans.
Many people in North Carolina are struggling with insurmountable amounts of credit card debt. This is especially true if they have paid for some significant expenses on credit or their income has declined after signing up for new credit cards. Across the country, people are accumulating increasing amounts of debt; the average individual debt reached $5,331 in 2019 on credit cards alone. Most people are unable to pay off their full balance each month; only 45 percent pay in full when they receive their monthly statements.