Some residents of Salem, Massachusetts, may be finding themselves deeper in consumer debt these days. If so, they are following a national trend. According to a leading financial institution, consumer borrowing is at an all-time high.
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.
The average household in Massachusetts and throughout America has a credit card balance of $6,081. It is not uncommon for credit card balance holders to carry that debt for many years, which can lead to thousands of dollars in accrued interest.
A NBC News/GenForward survey found that only 22 percent of millennials are not carrying debt. The survey found that 11 percent have more than $100,000 while roughly 25 percent of those between the age of 18 to 34 have more than $30,000 in debt. This has caused young people in Massachusetts and elsewhere to save less, which could leave them vulnerable to a financial emergency.
Massachusetts residents can use the bankruptcy process to find debt relief and get a fresh financial start. However, they should be aware of exactly how bankruptcy can affect their credit.
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.
Many Massachusetts residents are struggling to make their credit card payments, but a study from CreditCards.com reveals that individuals and families in other parts of the country have even more serious revolving debt problems. The consumer financial advice website looked at how much the residents of America's 25 most populous cities and regions owed to credit card companies and how long a worker earning average wages would take to pay this debt off, and Boston ranked sixteenth with an average balance of $6,455.
Rising interest rates and growing credit card debt balances may create financial issues for Massachusetts residents and others in the future. While increasing debt levels are generally seen during good economic times, it is possible to have too much debt. Now may be the best time for a person to take a strong look at his or her overall financial situation.
Residents of Massachusetts who have higher credit card debt than they did a year ago might take some comfort in knowing that they are not alone. Americans have more credit card debt now than they did a year ago, according to an Experian annual study, and the Federal Reserve reports that in 2017, the country reached a record high of more than $1 trillion in credit card debt. But the good news is that credit scores are up, too, which suggests that Americans are doing a pretty good job of handling their debts.
Massachusetts residents may be pleased to hear that the average credit score in America has increased in the past year to 675. That is the highest it has been since 2007. While many assume that millennials struggle with credit, they do not have the lowest average credit score when broken down by generation. That would be Generation Z with an average score of 634.