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Study sheds light into credit card debt

On Behalf of | Jun 21, 2018 | Bankruptcy

During the first quarter of 2018, Americans paid off $40.3 billion in credit card debt. However, many Texans are still in the red. A report by WalletHub, which used data from the credit agency TransUnion, the Federal Reserve and the U.S. Census Bureau, found that although the second largest amount was paid off since the beginning of 2009, credit card debt remains at the second highest point since the end of 2008.

One expert reported that it is not unusual for there to be a surge in debt payoffs in the first quarter of the year. This is usually due to increased spending during the holidays at the end of the previous year. These debts are often paid back with holiday bonuses from work.

Even if a card is paid off entirely, the owner may still be in debt. With an increase in companies offering loans, some people are getting loans to pay off credit cards at lower interest rates.

Credit card debt is on the rise, but there are some bright spots. During the fourth quarter of 2017, delinquencies dropped for credit cards and a number of other types of debts. A lower unemployment rate may also mean more income for people to use in paying off balances.

Unfortunately, many people are still struggling with credit card and other types of debt. Some of these people may want to consider filing for bankruptcy. Individuals may file for either Chapter 7 or Chapter 13 bankruptcy. Chapter 7 is for people whose income is below a certain level and may allow them to keep some needed assets. With Chapter 13, a person works out a payment plan with creditors and may keep assets such as a home.