You might believe you’re handling your credit card debt. However, what happens when another recession hits? Some experts are warning that the next one could begin as soon as next year. Whether they’re right or not, it will happen eventually.
An industry analyst with CreditCards.com says that even if the next recession isn’t as bad as the Great Recession of a little over a decade ago, those with credit card debt are less likely to weather it. Credit card interest rates are higher now. The average rate is over 17% compared with 13% at the start of the Great Recession.
Even though the economy has been doing well, credit card delinquencies have been increasing. Further, many Americans have little or no savings, and that’s a serious problem if they lose their jobs. Just over a third of Americans say they have enough money tucked away to pay their bills for three months. Over a quarter say they have no money saved for an emergency.
The CreditCards.com analyst advises people to start moving away from their high-rate credit cards. Cards that offer 0% on balance transfers for a specified period can be a good option. However, make sure you know what percentage transfer fee they’re charging and when the 0% interest rate ends. There are also lower interest rate options for consolidating debt like personal loans.
It can be a good idea to start cutting back on things you don’t need before you have to. When people sit down and look at their expenses, they see a lot of things they’d forgotten they were paying for and don’t need.
If your credit card debt has gotten so high that it’s affecting your ability to pay your other bills or if you’ve reached the point where you’re putting nearly all of your expenses on a credit card, it may be time to seek debt relief through bankruptcy. An experienced attorney can discuss your situation with you and provide guidance and help.
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