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Stagnant wages lead to surge in credit card debt

Families in Kentucky and around the country are sinking deeper and deeper into debt as wage increases across the country fail to keep pace with the rising cost of living. Data provided by the U.S. Census Bureau and the Federal Reserve Bank of New York indicates that total U.S. household debt has risen from $88,063 per family in 2002 to $132,529 per household in 2015, and the average amount American families owe to credit card companies has climbed to $16,061.

Since 2002, the average household income in the United States has crept up by only 28 percent, but health care costs shot up by 57 percent during roughly the same period. This all comes at a time when many families are struggling to keep up with the childcare costs involved in maintaining a dual income household. Credit card debt is surging in the United States as more and more families are living paycheck to paycheck, but financial experts warn that revolving debt is difficult to control and can be ruinously expensive.

Credit card rates are high, and American consumers are paying an average of 18.76 percent for the convenience of paying with plastic. However, the U.S. Federal Reserve announced a quarter point interest rate hike on Dec. 14, and the $1,292 each month required for the average American family to keep up with their credit card debt will be going up in 2017.

An unexpected layoff or illness could push many families over the financial edge, and choosing between debt relief options can be confusing and stressful when bills lie unpaid. An attorney with experience in this area could explain the differences between filing a Chapter 7 or Chapter 13 personal bankruptcy and pursuing an alternative approach like debt settlement or consolidation. An attorney could also make a recommendation about how to proceed based upon an individual or family's specific situation.

Source: The Washington Post, "Federal Reserve raises interest rates for second time in a decade", Jim Tankersley, Dec. 14, 2016

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