According to the latest Household Debt and Credit Report, Americans have accumulated a record $12.8 trillion in consumer debt. Of that amount, $1.2 trillion is related to auto loans and $1.3 trillion is related to student loans. Many South Carolina residents are burdened by auto loan debt, and it has increased around the country by 70 percent since 2010 according to the Federal Reserve Bank of New York.
A rule change could soon provide some relief to South Carolina consumers facing financial challenges due to credit card debt. Many credit companies issue clauses that force people into one-on-one arbitration instead of being able to join their cases with others in class-action lawsuits. These arbitration clauses that keep consumers from seeking court protection are about to undergo a significant change with a new rule from the Consumer Financial Protection Bureau.
South Carolina college students may be carrying more debt than previous generations, but they may also be more careful with their debt load. Around the country, members of the class of 2016 had an average student loan debt of $37,172. Overdraft fees and late payment fees for credit cards are also costing students.
For many people in South Carolina and across the United States struggling with credit card debt, a new action by the Federal Reserve may see their monthly payments growing even more expensive than they already are. The Federal Reserve Bank announced that it is hiking its federal funds interest rate on June 14.
Families in South Carolina and around the country now owe more money to banks and credit card companies than ever before. A report released on May 17 by the Federal Reserve Bank of New York put total U.S. household debt at $12.73 trillion at the end of the first quarter of 2017. The previous high was $12.68 trillion, which was reached at the outset of the 2008 financial crisis.
South Carolina residents were some of the roughly 70 million Americans who were contacted by a creditor or debt collector within the past 12 months. That was according to a study released by the Consumer Financial Protection Bureau. Of those who were contacted, 40 percent asked that the creditor or debt collector cease contact. In 75 percent of those cases, that did not happen.
Many people in South Carolina rely on their credit cards for both everyday and major purchases. Consumers often use them as a way of conveniently making purchases online and in stores without having to bother with managing cash. While credit cards definitely have their advantages, they can lead to unmanageable debt for some people.
According to the Nilson Report, which is a credit card and mobile payment trade publication, credit card debt in the U.S. exceeded $1 trillion dollars as of the end of 2016. Increased household income and improved outlook on the economy are considered to be the reasons that borrowing has reached a level not seen since the Great Recession.
When families in South Carolina do not earn enough income to cover their monthly expenses, they sometimes rely on credit cards to bridge the gap. A new report by NerdWallet shows evidence that households are relying on credit cards more and more. According to the study, average credit card debt for US households is now at $16,061, almost as high as it was in 2008.
Staying out of debt is a good thing; however, sometimes when old debts resurface, whether they were settled or not, making a payment may not be the right thing to do. Before making a payment on reappearing old debts, South Carolina residents may find these tips informative.