ARE YOU FEELING THE STING FROM RISING INTEREST RATES?
If you are a consumer in the market for a new car or a home, you’ve probably already discovered that the Federal Reserve’s rate increases have taken a huge bite out of what you can afford. It’s simple math, if more of your payment is going towards interest, then you have less money left to pay for what you really want. In fact, according to Mark Zandi, the chief economist at Moody’s Analytics, buying a home or car right now is “completely unaffordable for the typical American household because you’re mixing the higher borrowing costs with high prices.”
For example, the typical American household would need to use 42 weeks of income to buy a new car, as of August, up from 33 weeks three years ago. As bad as that is, it’s even worse for people that carry a credit card balance. The typical credit card carried a 20.7% interest rate in May, up from 14. 6% in February 2022. It’s no wonder that credit-card debt just passed the $1 trillion mark for the first time.
And when credit card rates go up, the minimum payment requirements go up as well. I meet with clients every week with ultra-high credit card payments. Their payments are so high they can no longer pay their utility bills or put gas in their car. But adding insult to injury, the payments are being applied to interest and are not reducing their balances!
When you can no longer make ends meet, it helps to meet with a bankruptcy lawyer to discuss your options. I can provide you with guidance on when bankruptcy is a good option for dealing with high credit card bills, delinquent utility bills or a vehicle repossession or pending foreclosure. Don’t delay, call today.
Ralph Guenther
