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Americans grappling with over $1 trillion in credit card debt

Credit card account holders in Massachusetts generally fall into two categories. The first type charges many transactions to build up points and rewards and pays off the balance every month. The second type cannot pay off the balance every month and accrues interest charges on their revolving debt balances.

According to data from Experian, 43 percent of card holders have revolving debt. Experian reported that on average people carrying balances owed interest payments of approximately $1,000 every month. These high balances have pushed the total amount of credit card debt in the country over the $1 trillion mark. The average balance owed on credit cards stands at $6,354 as of 2017.

Utilization rate impacts the credit scores of consumers as well. This rate refers to the percentage of an available credit line that people use. Even people who pay off balances in full every month might have reduced credit scores if they are accessing high percentages of their credit routinely. To avoid negative scoring, people should ideally use less than 30 percent of available credit. The credit scoring agency recommends that people hesitate to open new credit card accounts. Every time people open new credit accounts, their credit scores take a hit.

Even people who manage their money carefully might fall into debt due to circumstances like job loss or a medical emergency. Someone overwhelmed by credit card debt might benefit from consulting a lawyer. Legal advice could inform the person about consumer rights and strategies for debt relief. A lawyer could take action to challenge harassment by creditors and potentially negotiate a new payment plan that lets the person catch up. At times, bankruptcy presents a viable option for creating a financial fresh start. A lawyer could explain which debts a bankruptcy could discharge and prepare the court filings.

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