Personal Debt During Times of Financial Uncertainty

A Federal Reserve report shows U.S. household debt increased to a record $16.15 trillion in the second quarter, driven mostly by a $207 billion jump in mortgage balances, with credit card and auto loan debt also rising as consumers lifted their borrowing to deal with soaring inflation. This is a big number and it is hard to understand how this may directly impact you, plus this includes all debt. If you look at just credit card debt the amount seems more manageable at $841,000,000,000 or about $6728.00 per US household.

The Impact of Rising Interest Rates

At the current average balance and the average credit card interest rate in the U.S of 19.20% the minimum monthly credit card payment is $179.41. For someone with a mid-tier credit score, a realistic rate is 24.9% making the minimum payment $207.45. The Federal Reserve put the average Credit Card interest rate at the end of 2020 was 17.5% or $162.59 per month for the same balance.

The Impact of Inflation

$100 of groceries in 2020 now costs you $116.37. Consumer prices were up 9.1 percent over the year ended June 2022, the largest increase in 40 years, and this is on the heels of a 7% increase in 2021. Food, Fuel, Clothes, and Incidentals all cost more.

All of this is outside of your control.

Do you cut back or do you or do take on more debt in hopes this is just a temporary situation?

Take Action Against Overwhelming Debt in Times of Uncertainty

At some point, you cannot cut back enough, take on more debt, or continue to pay the ever-increasing interest on your debt. When this happens you need to have the help of experienced compassionate people. You are not alone. The debt relief attorneys at the Bond & Botes Law Offices help thousands of people every year that find themselves in debt they cannot repay. Call our offices for an absolutely free consultation or email us through our site.