People in Virginia who are carrying a lot of credit card debt are not alone. According to a report by WalletHub, in 2017, credit card debt increased throughout the country by $92.2 billion. A Federal Reserve estimate says the total owed in credit card debt is over $1 trillion.
The final quarter of 2017 was when the majority of the year’s debt was added, a $67.6 billion surge that was the highest accumulation in three decades. From 2015 to 2016, credit card debt more than doubled from $43 billion to $87 billion. It is unclear whether this increase is because there are consumers with unpaid balances that companies cannot collect on or low charge-off rates. Charge-off rates surged during the 2007 recession, and banks loaned money more conservatively. The more recent trend is banks extending credit to consumers with lower credit ratings. While delinquency rates have gone up slightly to 7.5 percent from 7 percent, this is still half what it was during the financial crisis.
The average credit card debt per household in the last quarter of 2017 was $8,600. More than 60 percent of people surveyed by WalletHub reported that medical expenses made up a portion of their medical debt. In 2015, the total out-of-pocket cost people paid for medical care was $338 billion.
People who are struggling to pay off credit card bills, whether they are due to medical debt or for some other reason, might want to talk to an attorney about debt relief options. Bankruptcy may be one solution, and individuals who have some income and want to keep some assets may want to look into the possibility of filing a Chapter 13 bankruptcy. This allows people to create a plan to pay off creditors over a period of several years.