South Carolina residents who carry balances on their credit card accounts will face higher monthly payments if the U.S. Federal Reserve announces another interest rate increase before the end of the year as expected. Individuals often turn to credit cards to cover basic expenses like utilities and food following an unexpected layoff or illness, and paying down revolving debt balances can be extremely difficult when the amount of money coming in each month is barely enough to make ends meet.
South Carolina residents and other Americans are poised to spend about $660 per person this holiday season, according to NerdWallet's 2017 Consumer Holiday Shopping Report. It looked at the shopping habits of 2,000 people aged 18 and over to come to this conclusion. While spending may not be up significantly from 2016 levels, roughly a quarter of respondents said that they overspent last year.
Consumers in South Carolina and around the country charged more than they have since the early days of the Great Recession in 2016 and added $87.2 billion in credit card debt, and a study released on Sept. 11 by the personal finance website Wallethub.com predicts that total credit card obligations in the United States will surpass $1 trillion by the end of the year. Rising interest rates could make this debt expensive to pay off as another sobering study released by Creditcards.com suggests that most Americans carry revolving debt for two years or longer.
South Carolina residents may be aware that household debt in the United States has been growing steadily. Banks tightened their underwriting standards in the wake of the 2008 financial crisis, but they have become more willing to extend credit in recent years as the economy has thrived. However, data from the Federal Reserve Bank of New York indicates that this willingness to lend has resulted in a large number of Americans falling behind on their credit card payments.
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.