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.
Young people in Oregon and across the country are facing an increasing debt burden. According to statistics from the New York Fed Consumer Credit Panel and Equifax, people between the ages of 18 and 29 owe $1.05 trillion in debt. While student loans comprise a substantial amount of this debt, other common burdens include credit card debt, auto loans, mortgages and other types of loans or consumer credit. This marks an increase in debt among this demographic, which last owed this much money in the last quarter of 2007. The trend at that time was later disrupted by the 2008 financial crisis.
Consumers in Oregon and across the U.S. are increasing their use of credit cards, according to a new report by CompareCards.com. In fact, the website found that Portland residents have the 10th highest credit card balance average in the country.
For business owners in Oregon and throughout America, credit cards make it possible to stay liquid. They can also provide a company with the capital it needs without having to ask for a traditional business loan. However, if a business isn't generating enough revenue, it can be difficult to pay down the balances accrued on those cards. In some cases, it is difficult to keep up with the minimum monthly payments.
Debtors in Oregon may try to settle their credit card debt for less than what they currently owe. They can choose to do so either on their own or with the help of a debt settlement company. However, there is no guarantee that credit card companies will agree to reduce a debt balance. If some or all of a balance is forgiven, it may need to be reported as income on a future tax return.
Families in Oregon have many demands on their income. A credit card debt analyst at NerdWallet explained that the rising costs of housing, food and health care continue to strain budgets and sometimes lead to missed credit card payments. Research from the Federal Reserve Bank revealed that in 2017 people paid other debts, like mortgages and student loans, before their credit card bills. When money gets tight, people will skip payments on their credit cards.
Many people in Oregon are struggling with excessive credit card debt. The financial shock to the economy in 2008 did not make long-term changes to how people handle their finances, especially once people went back to work if unemployed and started to bring in larger paychecks. While household debt across the country declined between 2008 and 2013, it has gone up significantly since then to reach an all-time high of $13.2 trillion in the first quarter of 2018. With low interest rates, people are, on average, better able to manage debt, but unexpected changes can be devastating to a person's ability to manage their finances.
Families can face all kinds of expenses, including the many related to raising children. It is not uncommon for families to turn to credit cards to help with these costs.
Consumers in Oregon and elsewhere may use credit cards to fund a variety of financial transactions. While making smaller purchases on credit accounts might seem harmless, these purchases can add up quickly if a person isn't careful. However, while a person can amass high amounts of credit card debt under a variety of circumstances, financial experts suggest that there could be consequences to placing certain purchases on similar accounts.
Many individuals in Oregon and elsewhere consider it essential to cultivate and maintain a positive financial future. While working toward improving one's credit score, there may be several available options to assist in the process, one of which is a credit card. Those who wish to make use of a credit card may find it advisable to gain an understanding of how to use one responsibly, and where to seek guidance should financial issues arise.