American consumers set a brand new record in 2019, but it is not one that many people would be proud of. Last year, adults took on another $77 billion of credit card debt. When asked about what they would do to get rid of credit card debt, a number of people said they would be willing to spend time under house arrest if it meant freedom from that debt. These individuals might not realize that bankruptcy is a much less drastic measure that can still create opportunities for financial freedom.
The figure of $77 billion comes from WalletHub’s 2020 Credit Card Debt Study. The study showed that 2019 actually started off on a good foot. In the first quarter of the year, consumers — including those in Connecticut — paid off $38.2 billion in credit card debt. The progress did not last long at all, and consumers added $35.5 billion, $21.5 billion and $57.9 billion over the second, third and fourth quarters respectively. WalletHub predicts that Americans are set to add another $85 billion in 2020.
The average household has $9,070 in credit card debt. WalletHub’s report also found that when asked if they would do virtually anything to erase their credit card balances, around 37% of people yes. This includes doing things like going under house arrest for an entire year, which millennials were more willing to do than baby boomers.
Connecticut consumers are not alone in their struggle to pay off credit card debt. But high interest rates can make chipping away at thousands of dollars of debt nearly impossible, especially when someone’s monthly interest is more than his or her monthly payment. People do not have to fantasize about getting out of debt though, especially when those fantasies involve staying in their own homes for a year. On the other hand, bankruptcy is a very real process that has helped many people find their way to better financial futures.