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The impact of rising interest rates on credit card debt

On Behalf of | Oct 2, 2023 | Bankruptcy Law

While most individuals may understand the risks involved with using credit cards to fund purchases, sometimes there may seem to be no other option. Financial challenges stemming from inflation have placed a significant financial burden on many families in Maryland, some of whom may have turned to credit accounts for aid during these times. However, with interest rates on the rise, this may also leave many facing an uphill battle with substantial credit card debts. 

Recent reports 

Recent reports indicate that the average interest rates on credit card accounts increased by 6% since March of 2022. The current average rate on these accounts sits at a staggering 22%. The rise of interest rates could make it much more difficult for those who carry revolving balances on similar accounts to pay down balances.  

In some cases, those who struggle to make even the minimum payment due on similar debts may also feel that their payments do little more than cover interest alone. While it might be helpful to avoid further use of high-interest accounts if possible, experts indicate that recent financial challenges have left many individuals relying on these accounts to get by. Those who face such a scenario may worry that they are on the brink of financial disaster and they might have questions about where to turn for advice in preparing to protect their future interests. 

Options for debt relief 

Issues with credit card debt continue to affect the lives of many families. Individuals in Maryland who wish to seek relief from similar financial hardships could consider speaking with an attorney for insight in addressing their available options. A bankruptcy attorney can help a client prepare to make informed choices about his or her situation and assist in choosing the best path with which to seek relief from the burdens of debt.