The amount consumers in Virginia and around the country owe to banks and credit card companies is expected to surpass $4 trillion by the end of 2018. This figure, which reflects revolving and installment debt but does not include mortgage balances, has risen by $1 trillion in just the last five years. Experts voiced few concerns over growing consumer debt levels when interest rates were close to historic lows, but a recent wave of rate hikes with the promise of more increases to come have prompted them to start issuing grim warnings about credit bubbles and unsustainable borrowing.
The Federal Reserve says that interest rates must be increased to rein in a surging economy and prevent inflation from taking root, but consumer advocates worry that credit card rates are already too high. According to the consumer information website LendingTree.com, American consumers spend more than $10 billion each month on credit card interest and fees and pay annual percentage rates that average between 16 and 17 percent.
Total credit card debt in the United States has already reached $1.04 trillion, and it is expected to grow by a further 5 percent or so during the busy holiday shopping season. This figure has risen by almost a quarter since 2013. Non-revolving debt such as automobile and student loans has also surged in recent years and now stands at $2.9 trillion.
Individuals often fall into inescapable debt after turning to credit cards to make ends meet following an illness, layoff or another unexpected setback. Attorneys with experience in this area might explain how filing a personal bankruptcy offers an escape from the credit card trap and provides the chance of a fresh start. Filing a Chapter 7 or Chapter 13 petition also generates and automatic stay that orders creditors and debt collectors to immediately cease all collection efforts end make no further calls.