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Interest rates for credit card debt at all-time high

Many Florida residents and others around the country frequently use credit cards for household purchases. While some consumers only use the cards for large items to earn points, others must use them for everyday expenditures. Still others might need them for emergency situations. Regardless of the type of usage, a recent report from the Federal Reserve shows that credit card debt in the country has now surpassed $1 trillion.

One area of concern is the decrease in savings for the average consumer. Financial advisors recommend that a person save roughly 10 to 15 percent of income. However, data shows that the actual savings rate is close to 3.5 percent. This pattern results in a smaller emergency fund and forces families to use credit cards for unforeseen expenses.

An online credit card company estimates that around 29 million people carry balances on their credit cards from month to month. Those households have balances on their card over $16,000, which is three times the amount of other families with cards. Unfortunately, the situation may worsen as the average annual percentage rate is now at an all-time high of 16.15 percent.

Experts recommend that consumers take action immediately to avoid increases in balances and interest owed. A budget should be developed and adhered to each month. Many online tools are available that can help families record detailed income and expense figures. In addition, consumers must use judgment in determining whether to utilize a credit card for a purchase. Priority should be given to a necessity over any discretionary purchases.

Credit card debt can be overwhelming and it may appear that there is no end in sight with high balances and interest payments. A Florida bankruptcy attorney can offer guidance to develop a plan to get the situation under control. An experienced lawyer will help clients work toward getting back on the right track financially.

Source: businessinsider.com, "Why 20 million credit-card carrying Americans probably aren't happy right now", Sean Williams, Oct. 3, 2017

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