As Florida readers may be aware, it seems to be much easier to get into credit card debt than it is to find a way out. There are many reasons why Americans turn to credit cards, from paying for college tuition costs to everyday expenses. Credit card debt is an issue that can potentially affect most demographics, but the main differences lie in how these different groups handle this and other types of debt.
Many families and individuals with higher incomes tend to have a negative view of debt, especially after recovering from the recent financial crisis. Consequently, those who are able to do so are paying off loans and refinancing mortgages to shorter terms. However, not everyone is able to quickly pay off debt.
It has been noted that the lack of wage raises over the last few years has led to lower-income earners accumulating non-discretionary debt for what would be considered necessary expenses. These expenses include student loan debt, car loans and even credit card charges for food and clothing. With more debt and no increase in wages, what can the average American do to deal with the increasing amount of debt?
As consumers feel more confident in borrowing money and relying on credit, credit card debt and other types of debt will continue to increase. This can eventually lead to a consumer feeling trapped in a debt cycle from which they cannot escape. Fortunately, the bankruptcy process exists to assist Florida consumers and other Americans in this situation. Bankruptcy is rarely perceived as a positive step, but it is a legal and organized method to financial freedom in a specified time frame.
Source: marketwatch.com, “Americans are getting into debt to afford food, gas“, Peter Atwater, June 19, 2014