NASHVILLE, Tenn. (WTVF) — For the first time in American history, people across the country owe more than a trillion dollars in credit card debt.
Finance professionals say people’s finances are stretched thin due to inflation, high housing costs, and other expenditures that has forced millions of people to collectively owe more than ever before.
Financial Educator Thomas Nitzsche says interest rates on credit cards are getting higher and that makes it harder to pay down the debt. A new report by lending tree says the average credit card interest rate is close to 24.5%.
One financial educator says with the struggles of paying for daily expenses and being pushed to limit on credit cards, it's causing more people to get help. Nitzsche says by the time they reach out for help, they're typically about $26,000 worth of credit card debt.
"I think between medical and just general cost of living is the reason we're seeing more people turn towards credit cards, and then it becomes harder to pay them down as those balances get higher and higher, and the interest rate gets higher and higher,” said Nitzsche.
Rising rates are sparking debates in congress. One senator from Mississippi introduced legislation to cap interest rates at 18%.
So, what do you do if you need help?
Credit counselors often help people lower interest rates from around 30% to single digits. Understand your budget and see where you can cut back. Consider consolidating your credit card debt. If you consolidate by using a personal loan, you can use the money from the loan to pay off the debt. Nitzsche says counselors are always available for advice.
