In 2017, people throughout the country added $92 billion in credit card debt. That is twice the annual average since the end of the Great Recession. For Louisiana cardholders, recent rate hike increases may have be harder to take even if the raises are only .25 point each. According to WalletHub, there have been four years in the past 30 that saw credit card debt increase by that much.
In each of those years, the charge-off rate increased. Lenders base their willingness to extend credit in part because of this rate. However, as debt levels and interest rates rise, it may make it harder for individuals to handle their payments. The average household has $8,600 in debt, which is about $138 more than WalletHub says is sustainable. According to Bankrate, the average credit card interest rate is 16.8 percent.
However, as people have varying levels of credit card debt, interest rate hikes may not hit everyone equally. In New York, each rate hike costs $153 in additional monthly payments on an average balance of $10,193. In addition to the rate hike in March 2018, there could be as many as five more in 2018 and 2019.
What Are My Options?
Individuals who are having trouble keeping up with their debt payments may be interested in filing for bankruptcy. Doing so may allow them more flexibility in budgeting by getting rid of insurmountable debt. Furthermore, filing for bankruptcy may keep creditors from calling, writing letters or taking other steps in an effort to collect on a debt.