A recent study by CardHub.com found that people in the U.S. recently experienced a huge surge in credit card debt. Even though in the first quarter of 2014 consumers paid off $32.5 billion in credit card debt, they racked up a shocking $28.5 billion in the second quarter. That second figure represents the largest surge in credit card spending in the last six years.
Some assertions insist that with increasing credit card debt comes a reduced amount of shopping this holiday season (it is coming up, after all). However, there is an alternate theory to this: what if all this debt, and potentially the inability to pay it off, makes people dive deeper into credit card debt to pay for holiday items?
Every holiday season there is a huge surge in spending, and every year many people suffer from that spending months later. The credit card bill comes in, and they realize they bit off more than their wallet could chew. The debt they now have on their credit card could be with them for a long time, potentially racking up massive interest payments that only make it harder to get out of debt. This is the vicious cycle of debt, and thankfully, there is a way out of it.
No one necessarily wants to file for bankruptcy, but it is a solution when your unsecured debts run amok. Unsecured debts, such as credit card debt, can be eliminated with a bankruptcy filing, easing your anxiety and giving you a chance to rebuild your financial life.
Source: MSNBC, "Rising credit card debt may dampen holiday budgets," Kelli B. Grant, Sept. 11, 2014