Those who have credit card debt pay an average interest rate of 18%. However, Oregon residents and others who have poor credit could pay as much as 25% interest on a revolving balance. One way to avoid paying interest altogether is to pay down a balance by the completion of the billing cycle. However, this is not always possible because of student loan or other debts a person may have.
In the first quarter of 2019, 8% of credit accounts for individuals between the ages of 18 and 29 were 90 days past due or more. This has been seen as a cause for alarm because people in this age range have largely been perceived as not interested in credit cards or other forms of debt. According to the New York Federal Reserve, 52% of those who are in their 20s have a credit card.
In 2012, only 41% of individuals in that age range had a credit card. While the rise in credit card delinquencies may be concerning for younger Americans, it doesn’t indicate that Americans overall are overextended. According to the Fed, the debt-to-income ratio in the United States is at its lowest in almost 40 years. For those who are struggling to make credit card payments, it may be worthwhile to look into a balance transfer to an interest-free card.
It is generally possible for credit card debt to be discharged in bankruptcy. This may make it easier to pay student loan or other debts that may not be discharged through this process. Depending on a debtor’s individual circumstances, he or she may not lose assets, such as a house or car. Furthermore, cash in a retirement account or certain other assets may be exempt from liquidation in a bankruptcy case.