It takes longer for people in some states to pay off their credit card debts than it takes for people in others. Texas is one of the states where people carry the highest balances on their cards, but it's not among the worst when it comes to payoff time. The length of time it takes a person to pay off his or her credit card debt is sometimes called the credit card burden.
Debts owed by consumers in Texas and across the U.S. are expected to hit $4 trillion by the end of 2018, but the chief economist from LendingTree says it's not a reason to worry. While total consumer debt is a big number, he said, the economy is more stable and income is also increasing. Through September 2018, American consumer debt totaled $3.93 trillion, $1 trillion of which was from credit cards. The other $2.93 trillion was from things like auto loans and student loans.
Debt forgiveness may sound like an attractive option to Texas consumers who are overwhelmed by their financial obligations, but the companies offering these services often fail to live up to the promises they make. Even when they do, their customers are usually left with lower credit scores and unexpected tax bills. Debt forgiveness is based on the idea that lenders will agree to cut balances significantly in order to get at least some of their money back, but things rarely work out that way in the real world.
Debt has become a huge problem for consumers throughout Texas and the rest of America. U.S. citizens collectively owe $1.41 trillion in student loans, $1.23 trillion in auto loans and $815 billion in credit card debt. However, there are several important steps a person who wants to get out of debt can take.
Some people in Texas might be interested in the recent decision in a legal case involving a consumer who said he did not owe the debt issued by a credit card company. The man filed a lawsuit against Main Street Acquisition Corporation that alleged that the company had violated the Fair Debt Collection Practices Act.
Incomes naturally vary among individuals in Texas, but on the whole, gender influences income and levels of credit card debt. The Federal Reserve System has calculated that women have a median salary of $41,554 compared to men at $51,640. Lower income translates into higher credit card debts. A recent study found that 26 percent of female credit card holders doubted that they would pay their full balances this month. When asked the same question, only 14 percent of men doubted that they would pay everything on their credit accounts.
Many people in Texas who struggle with debt decide to cut up their credit cards so that they can avoid buying items they cannot truly afford. While credit cards can get many people into debt, they also can play an important role in a plan to responsibly rebuild a good credit history.
Many Texas residents struggle to pay their monthly credit card bills. As part of the agreement to obtain credit, cardholders sign documents agreeing to pay all the debts that they owe to the credit card company plus interest. When these debts aren't paid on time, many credit card companies realize that referring the matter to attorneys or collection agencies simply isn't worth it.
Texas residents who are looking to borrow money will take loans that are labeled as secured or unsecured. A secured loan is one that is backed by an asset such as a home or a car. If a borrower fails to make a payment on a secured loan, the lender has the right to take back the asset linked to the loan. For instance, if a person fails to make payments on a car loan, the lender can repossess the car.
When a person or business in Texas cannot pay debt, bankruptcy may be an option. This process allows for some or all debts to be discharged either through liquidation or through a repayment plan. Those who file for Chapter 7 bankruptcy will use the money obtained after selling non-exempt assets to pay off creditors. Debtors will likely need to take a means test to determine if they can afford to pay off some of their debts.