Debt, since the recession began, has been increasing not only for individuals but the nation as a whole. With foreclosures and the higher percentages of unemployment, credit cards have become a necessary means for some to survive. However, as this debt continues to pile up, it can put many families in danger.
According to the Federal Reserve, the amount of household debt has decreased substantially since 2007. It has fallen 19 percent, which can provide hope for the economy in 2013. However, others doubt the legitimacy of this number, as the banks may be writing off the balance of debt. This does not mean that the debt is forgiven, but that the bank's statements will show a lesser dollar amount for what is owed to them.
Credit card debt and other debt can have a significant impact on a person's credit rating. A credit rating can be lowered if debts are not paid on time. The lower the credit rating, the lower the credit score. With a lower credit score, it will be harder for an individual to get a good rate on future loans for housing, auto loans or other necessary loans. Further, if an individual has too much credit card debt, it can force them to go into bankruptcy. Bankruptcy may be a necessary option, and can either eliminate your debt or create a reasonable payment plan for paying back your debt, depending on the type of bankruptcy you qualify for.
Credit card debt has been a problem that has haunted our nation for many years. If the amount of credit card debt continues to decrease, it can help the economy immensely.
Source: The CW-39, "Household credit card debt down in U.S.," Sept. 19, 2012