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Why people use credit cards so often

According to NerdWallet, the average American household has $15,654 in credit card debt. When interest charges are considered, that debt could be costing Florida residents and others roughly $904 per year. The average interest rate on a credit card is 14.87 percent, and that figure is expected to rise as the Federal Reserve plans to raise interest rates in 2018.

Credit card debt makes up the lowest portion of a household’s debt load. Mortgage debt alone account for roughly two-thirds of a household’s debt with student loans and auto loans also higher on the list. However, more people are relying on credit cards because living expenses have gone up faster than income. Medical expenses, food and housing are costs that have increased the most in recent years.

To keep credit card debt to a minimum, it may be best to keep spending to a minimum. Keeping an emergency fund of $1,000 ready to go may also reduce the need to put emergency costs on a credit card. It may be possible to negotiate an interest-free repayment plan with hospitals or other health providers.

Those who need a way to deal with credit card debt may wish to consider filing for bankruptcy. In a Chapter 13 case, it may be possible for debtors to retain property while also getting creditors to stop calling or writing about the debt. An lawyer might talk more about how credit card debt is repaid in a Chapter 13 case and what happens if the debt is not fully repaid after three of five years. During the repayment period, it may be possible to renegotiate loan terms.

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