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Credit card debt on the rise again

In 2017, folks in Massachusetts and throughout the country added $92.2 billion in credit card debt, which was the most since 2007. That pushed the overall credit card debt in the United States to over $1 trillion, according to the Federal Reserve. In the final quarter of 2017, the average American household owed $8,600, which was up 6 percent from the same time period in 2016.

Over the final quarter of 2017, Americans added $67.6 billion in credit card debt, which was a 16 percent increase from the fourth quarter of 2016. It was also the largest increase in a single quarter since 1986. One explanation for this surge is that banks are lending to people who don't have great credit scores. Another explanation is that credit cards are being used to pay medical debts.

In 2015, Americans paid $338 billion for health service out of their own pockets. Of the individuals who took part in WalletHub's 2018 credit card study, 62.3 percent said that their credit card debt was caused by medical issues. While delinquency rates remain below the 15 percent level that was seen during the Great Recession, they have risen in the past year. In 2017, the delinquency rate was 7.5 percent compared to 7 percent in 2016.

Those who are feeling overwhelmed by credit card debt may benefit from filing for bankruptcy. It may be possible to put a stop to creditor contact as well as halt creditor collection actions, such as a lawsuit. Depending on what a person used a credit card for, it may be possible to have that debt discharged in bankruptcy. However, if a credit card was used for tax or student loan debts, they may need to be reorganized and paid off over time.

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