In a consumer-oriented economy, credit cards are often the preferred payment method by most Americans. However, the problem with overusing a credit card lies in the fact that the debtors or consumers using the credit card can overdraw from their accounts even when they do not have sufficient funds in their bank accounts. Thus, a debtor can run the risk of incurring major debts that they may not be able to repay immediately.
Debtors often fall into a debt trap where they use multiple credit cards to repay the credit card debts of one of the cards with another. That can lead to a vicious debt cycle where the debtor cannot repay the debt for a long time. In some extreme cases, such debt traps and credit card debts may even lead to bankruptcy.
New research conducted by CardHub revealed that credit card debt repayment had increased in the first quarter of 2015 compared with 2014. The surge in debt repayment has been credited with better economic trends. Several credit card holders have been able to repay their credit card debts in the recent past. Even with this optimistic trend, it was calculated that credit card holders could add approximately $57 billion in lieu of debt this year alone. There was also an estimated $831 billion in outstanding credit card debts in the country.
Debtors who have been dealing with credit card debt and are unable to get out of debt often find it helpful to consult an attorney who can help the debtor to negotiate with the credit card companies in order to help them to get out of debt and learn about their repayment options. The attorney often serves as the last opportunity to save the debtor from bankruptcy.
Source: Fortune, “Here’s how much credit card debt we’ll have this year,” Tom Huddleston Jr., June 10, 2015