There’s good debt in Pennsylvania, and then there’s bad debt. Good debt, such as a mortgage, eventually leads to an asset once the debt is paid in full. When it comes to credit card debt, on the other hand, a person typically ends up paying more than necessary for a purchase over the long haul without getting any more benefit from doing so. People are generally aware that credit card debt is worth targeting first when trying to get out of debt.
According to recent data, more than 42 percent of people in America have debt due to credit card usage. The average amount of debt totals nearly $11,000. Meanwhile, the average is nearly $9,000 for millenials and more than $12,000 for those belonging to Generation X. Households with credit card-related debt are more than $15,000 in debt on average.
People can try to pay down their credit cards using money in their bank accounts. It is wise to have emergency fund money in a bank, but savings account money today typically earns a small amount of interest. Even an account that generates a “higher yield” pays interest of just under 1 percent. Meanwhile, more than 75 percent of people’s credit card interest rates are around 15 percent or more. Using savings to get rid of this high-interest debt can save a person a large amount of money in the long-run.
Although many people make a valiant effort to get rid of their credit card debt, they may feel trapped because they don’t earn enough to cover these debts. Filing for bankruptcy is one strategy for eliminating this burdensome debt. By discharging extensive debt, an individual in Pennsylvania can take advantage of a new financial beginning in our state.
Source: dailyfinance.com, "Is Your Credit Card Debt Average? And What's Average?", Michele Lerner, June 11, 2014