By: Robert J. Nahoum
Consumer credit card debt has been increasing at an alarming rate in recent years. According to the Federal Reserve, consumer credit card debt in the United States has increased by more than $70 billion since 2015, with the total amount of outstanding credit card debt now standing at over $1 trillion.
I’ve seen this movie before – I have been practicing debt and credit law in the New York Tristate area for over twenty years. I have defended New York and New Jersey consumers in debt collection lawsuits during the worst of the financial crisis. The wake of destruction during those times still reverberates with my clients today. Now, in the wake of the Covid shutdowns and rapidly rising inflation, the new trend in consumer debt is concerning. High levels of consumer credit card debt can lead to financial stress and even bankruptcy. It is important to understand the reasons behind this trend and what steps consumers can take to manage their credit card debt.
One possible reason for the increase in consumer credit card debt is the availability of credit. Credit card companies have been aggressively marketing their products to consumers, offering generous rewards programs and low introductory interest rates. Many consumers have been enticed by these offers and have taken on more credit card debt than they can afford to pay back.
Another reason for the increase in consumer credit card debt is the high cost of living. Many consumers are struggling to make ends meet as the cost of housing, healthcare, and education continues to rise. They may be using credit cards to cover their basic expenses, such as groceries and gas, which can quickly add up over time.
So, what can consumers do to manage their credit card debt? The first step is to be aware of how much credit card debt you have and what interest rates you are paying. Make a budget and a plan to pay off your debt, starting with the highest interest rate cards first.
If you are struggling to make your minimum payments, reach out to your credit card company and see if they can offer you a lower interest rate or a payment plan. It is important to be proactive and communicate with your creditors before you fall behind on your payments.
Finally, avoid taking on more credit card debt than you can’t afford to pay back. Use credit responsibly and only charge what you can pay off in full each month.
The recent increase in consumer credit card debt is a cause for concern. However, with careful planning and responsible credit use, consumers can manage their debt and avoid the negative consequences of high levels of debt.
If you need help settling or defending a debt collection law suit, stopping harassing debt collectors or suing a debt collector, contact us today to see what we can do for you.
The Law Offices of Robert J. Nahoum, P.C