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Americans going deeper into credit card debt in 2014

Most of us know what we should do in terms of credit habits in order to get on track and out of debt. Unfortunately, knowing and doing don’t always match up. According to recent numbers from CardHub.com, Americans are paying down less in credit card debt than we did last year, and significantly less than we paid down five years ago, in the midst of the recession. In fact, it is projected that Americans will significantly add their credit burden this year.

Essentially, the evidence is showing that Americans have gotten over a temporary fear of credit caused by the recession. This has raised the concern among some that credit card debt may be a ticking time bomb in terms of default. There are problems with more than just credit card debt, though—student loan debt is a major concern as well. 

One of the issues we speak about frequently on this blog is the fact that credit is not necessarily something to be shunned, either before or after bankruptcy. Indeed, careful use of credit and credit cards can improve one’s credit score and help speed one’s credit recovery. Contrary to popular belief, one does not have to take on debt to use a credit card. In addition, cancelling credits cards does not necessarily improve one’s credit score, nor does applying for a credit card damage your credit score.

These things having been said, people can get into trouble quick with credit cards when they don’t keep up with payments and use them carelessly. In some cases, folks get so bad into credit card debt that bankruptcy may be the most sensible option. Bankruptcy should never be taken lightly, but well-situated debtors can benefit greatly from filing and quickly be on their way to recovery.

Source: TIME, “The Credit Card Bomb Just Waiting to Go Off,” Martha C. White, June 11, 2014.Fox Business, “5 Credit Card Myths Debunked,” June 26, 2014. 

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