Who is most at risk for personal bankruptcy over credit cards?

Credit card debt might feel like an unavoidable feature of modern life, and rising balances seem to support this idea. Consumers in Connecticut and across the rest of the United States seem increasingly willing to take on more and more debt on their credit cards, with the current average debt for individuals at $5,331. So are those with more debt in worse shape and more likely to file for personal bankruptcy than those who owe less? Maybe, but maybe not.

Average credit card debt varies depending on several different factors, with two main contributing factors being age and income levels. The group with the highest individual average — $9,096 — includes those between the ages of 45 and 54. For a comparison, consumers over the age of 75 only owe an average of $5,638. However, this points back to the second factor — income. Retirees generally owe less on their credit cards because they are living on fixed incomes.

Consumers with high incomes generally owe more on their credit cards than their peers who earn less. So are these high-earners, high-spenders at a greater risk for bankruptcy? While that depends on a variety of individual factors, those in lower income brackets probably face an even greater struggle to repay relatively smaller debts. This is because their income-to-debt ratio is significantly different than those who owe more, but also earn much more as well.

Living with credit card debt is not easy. Interest rates can cause even relatively small debts to grow out of control, leaving consumers across all age groups and income levels struggling. Although personal bankruptcy might seem like a scary idea at first, many people in Connecticut have found that the process significantly relieves their debt-related problems.