Struggling with credit card debt? Why you should tackle it now

On Behalf of | May 3, 2022 | credit card debt |

To the unwary, a credit card can seem like a gift that keeps giving. Yet as many people find out, it can soon become something that keeps taking.

Financial experts predict that credit card companies are about to start taking even more if you have outstanding debt. Why is this?

Interest rates are rising

Most credit cards have variable rates linked to the interest rate set by the Federal Reserve. As that looks set to rise, so will the rate of interest on your credit card debt by around 2%. That might not sound like much, but it equates to almost $900 extra if you make minimum payments on a $5,500 balance.

If the reason you are making minimum payments is that that is all you can afford, this is clearly going to be a problem. That, in turn, could lead to late fees, which further complicate trying to pay down those credit cards.

The cost of living is rising

The price of most things is rising. New Jersey rentals rose an average of 16% last year. Events of the past two years have caused supply problems, which caused the prices of many goods to rise. The war in Ukraine is exacerbating that problem, causing increases in energy and food costs that are affecting people worldwide.

So, if you are struggling now, imagine how bad it will be a few months down the line.  If you have tried your best to pay your debts, but it is just not working out, it may be time to take a bigger step. Finding out more about bankruptcy could be the first step on your path to a debt-free future.