Many people in New Jersey have credit card debt that will take a long time to pay off. When a person's credit cards are maxed out, the credit utilization numbers can wreak havoc on their credit score. Although making the minimum payment each month may keep interest charges from adding up, these payments do little to chip away at the actual debt.
A consumer website recently created a report about the average credit card balances in the 25 largest U.S. cities. Credit report data from Experian showed that the average credit card balance in 2014 was $4,410. If the average working person made regular payments on that amount of debt, it would take them 13 months to pay it off and cost them $327 in interest charges.
The amount of credit card debt that is held by U.S. households has risen significantly over the last year. According to the Federal Reserve Bank of New York, Americans hold a combined total of $700 billion in credit card debt, up by $17 billion since last year. Although U.S. credit card holders are carrying more debt, the number of households in the U.S. that own credit cards has decreased. The National Foundation For Credit Counseling says that 34 percent of U.S. households have credit cards with revolving debt compared to 44 percent in 2009.
When credit card holders can only afford to make the minimum payment each month, it may take them a lot longer than 13 months to pay off their balances. Some people even end up in the unfortunate situation of watching their credit card balance inflate because they are unable to afford to make the minimum monthly payments. An attorney may explain to a client who is in this situation that filing for bankruptcy may result in having some of the unsecured debts discharged.