The amount of money U.S. consumers owe to credit card companies reached almost $900 billion at the end of 2018 according to a recent report from the Consumer Financial Protection Bureau, which means that the total revolving debt in the United States is now more than $100 billion higher than it was before the recession. Most of this new debt is currently being racked up by borrowers with either prime or super-prime credit ratings, but credit card spending is increasing the fastest among consumers in Oregon and across the company with lower credit scores according to the CFPB.
Many people in Oregon and across the country are struggling with the growing weight of credit card debt. Nationwide, Americans owe more than $1 trillion on their credit cards. During the second quarter of 2019, American consumers accumulated an additional $35.6 million in debt. Over the year, some estimates expect that they will owe another $70 billion. Oregon ranks 29th in the country as far as credit card debt escalation, but many people in the state are finding it difficult to make ends meet. Many people who owe a significant amount on their credit cards are also struggling with other bills.
Many people in Oregon are struggling with a growing debt burden because they are unable to pay off their credit cards every month. Analysts advise that credit card debt can be particularly dangerous to carry over a long period due to the high interest rates that come along with it. According to some economists, up to 82% of credit card balances are carried for over one month, often turning into long-term debt. The problem isn't restricted to those with poor credit; even those with high credit scores often carry a balance.
The Consumer Financial Protection Bureau reports that over 70 million people in Oregon and the rest of the United States have had interactions with debt collectors. During these interactions, 25% of the debtors have felt threatened. However, people should learn about their rights and take certain actions when they are sued for a debt.
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.