The average American has four credit cards with an unpaid balance of more than $6,000, according to the most recent data from the Consumer Financial Protection Bureau (CFPB). Total credit card debt in the United States reached $868 billion by the halfway point of 2019.
While credit card debt approaches $1 trillion, banks and other creditors continue to raise spending limits on cards by 11.5% to an average amount of $22,589. The average credit card debt in North Carolina reached $5,698 in 2019, a 1.3% increase from 2018.
Consider a consolidation loan to pay off your credit card debt
Interest rates for credit cards can be higher than all your other loans combined. The faster you pay off the balance, the less you’ll pay in interest. A personal credit card consolidation loan may be a good option for these reasons:
- Reducing your interest rate: Consumers typically pay much more interest on their credit card balances than other loans, including mortgages, student loans or car loans. Annual percentage rates (APR) for credit cards routinely run between 10% and 25%. Personal loans can cut that rate closer to 5%.
- Fixed monthly payment: Many credit cards have a variable interest rate, meaning your payments can rise even if you’ve stopped using your card. Personal loans have a fixed interest rate, which provides a predictable monthly payment.
- Easy to apply: You can apply online for a personal loan by shopping for lenders with the best interest rates. Lenders will look at your overall financial situation, including income and credit score to determine an interest rate. A significantly lower rate can potentially save you hundreds of dollars each year.
Bankruptcy relief can help those struggling with debt
Personal credit card consolidation loans usually range from $1,000 to $100,000 depending upon a person’s overall financial health as well as the lender. Most unsecured loans must be repaid in two to seven years. However, if your debt is overwhelming, filing for bankruptcy could help put your financial house in order. An experienced bankruptcy attorney here in North Carolina can answer your questions to help you decide whether Chapter 7 protection is a good option to restore your financial freedom.