If you are like most people in the country, you spend an average of about $98 a day. You may not even think about it when you pull the credit card from your wallet to make those purchases. Whether it is a new TV or dinner out, Americans are using their credit cards more freely than ever before.
However, it may not feel so much like freedom when you see the credit card balance rising each month despite your attempts to pay down the debt. If you miss a payment, or if charges or late fees take you over the spending limit, you may be shocked at the dramatic jump the balance makes on your next bill.
How people are using their credit cards
Credit card companies are offering higher spending limits each year. This, combined with attractive incentives, makes using your card very tempting. Some perks that entice people to open and use credit cards include the following:
- Cash back
- Zero percent interest for months or years
- Travel miles
- Points for gas, groceries or other everyday items
Gone are the days of saving the credit card for large items like appliances or for emergencies. In fact, you may find yourself using your cards more often for daily items like your morning coffee or eating out, justifying it by telling yourself you are earning points for your purchases. Because of this, you, like the average American household, may have close to $8,000 in credit card debt.
Is your optimism waning?
Economists expect the nation’s total credit card debt to pass $1 trillion this year, which is not necessarily a bad thing. Spending shows optimism and confidence in the direction the country’s economy is going. The problems arise when people begin having difficulty paying what they have charged. You may already be experiencing such problems.
Those watching the trends predict that credit card interest rates will rise at least twice in the coming year. You may not like to hear this news, especially if your bills are already unmanageable or creditors are beginning to call to harass you for payment.
Many achieve peace of mind after learning how bankruptcy can help them reach financial freedom by reorganizing or eliminating their debt. Filing for bankruptcy immediately stops most collection actions, which means the phone calls and threatening letters will cease, and you can begin to get your finances back on track. If you are already losing sleep because of the burden of credit card debt, you may find reassurance in speaking to a bankruptcy attorney about your options.