Data says homeowners pay more credit card interest than renters
Florida readers that own homes or are considering homeownership may be interested in data released by NerdWallet that indicates homeowners are more likely than renters to incur higher credit card interest charges. According to the data, renters rack up $537 annually in credit card interest charges while the average homeowner incurs $1,001 in interest charges per year. It seems counterintuitive as homeownership is thought to help people save money in a number of ways. However, owning a home comes with a number of expenses beyond the mortgage payment.
Property taxes, for example, is an expense that renters don’t have to pay, and they have historically increased over time. They have even been shown to increase during periods when the property itself is losing value. The cost of property insurance is likewise variable and another cost that homeowners incur while renters do not.
One of the most major expenses that people may overlook when considering buying a home is the cost of repairs and maintenance. Estimates indicate that a typical homeowner might spend between 1 and 4 percent of the value of the home each year on property upkeep. On a home that’s worth $300,000, 1 percent amounts to $3,000 a year toward maintenance, and 2 percent is $6,000. When major repairs, like roof or heating system replacements, are required, homeowners may turn to credit cards to cover the costs.
Typically, renters do not pay for repairs or the maintenance costs for their dwellings. These are expenses that can sneak up on homeowners and cause them to use credit cards. Individuals who are struggling to pay down debt may wish to speak with a lawyer about the available options. An lawyer with experience in bankruptcy law may be able to offer advice about the debt reduction or elimination options available. A lawyer might draft and file the documents necessary to begin a Chapter 13 bankruptcy case or attempt to negotiate debt reduction with creditors.