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Stagnant wages may be driving rising credit card debt levels

Consumers in Kentucky and around the country had amassed more than $1 trillion in credit card debt by the end of 2016 according to a leading trade publication. Total consumer debt in the United States has now risen to levels last seen in the months following the 2008 financial crisis, and economists say that Americans are taking on more debt because wage increases over the last 10 years have not been enough to offset the rise in living costs.

Many American families carry no revolving balances at all, but those who do owe money to credit card companies are sinking deeper and deeper into debt. The average combined revolving balances of these families is $16,061 according to the financial information website NerdWallet, and this debt accrues interest at annual percentage rates that average 19.36 percent. The average American household pays more than $100 in revolving debt interest each month, but this figure could be misleading as it fails to take into account the differences in costs between families that carry balances and those who do not.

A senior executive at one of the nation's leading credit monitoring companies says that the increase in credit card debt can be largely explained by promotions that encourage consumers to open new accounts by offering them bonuses or cash back deals, and the data suggests that these efforts are being received well. The total number of credit cards held by Americans plunged during the Great Recession, but experts believe that the number of revolving accounts will surpass pre-recession levels by early 2018.

Credit cards provide consumers with a simple and convenient way to borrow, but revolving debt can become a trap when people are only able to make the minimum payment each month. Austerity measures are rarely enough to escape this problem, but experienced debt relief attorneys could explain that filing for personal bankruptcy may end creditor harassment and open the door to a new financial future.

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