Credit card delinquency rates among people in their 20s and 30s are rising, and it is easy to see why. Rent, groceries, healthcare—everything seems to be getting more expensive while salaries have barely increased in years.
When your paycheck does not stretch far enough, you might find yourself relying on credit cards to cover the gaps. But this can lead to a stack of debts you cannot pay back, with interest charges growing into a significant amount.
If you are at risk of delinquency, which is when a credit card holder misses their monthly payment, it’s essential to address it as soon as possible.
Economic factors affecting young adults
A combination of slow income progression, lower savings, rising costs, and the weight of student loans makes it tough for you to make ends meet, let alone pay off credit card balances. Although you might try to pay at least the minimum balance to avoid delinquency, financial stress can make it seem impossible to pay in full.
In Michigan, the average student loan debt exceeds $30,000 – a significant burden when you’re just starting out. Add rising rent and food costs, and it’s easy to see why delaying credit card payments has become common.
But there’s hope.
Solutions for resolving credit card debt
Credit cards with overdue payments are already delinquent. While one instance of delinquency can be resolvable, months of unpaid debt can cause interest charges to climb, damage your credit score, and put you at risk of facing a lawsuit.
Fortunately, there are many ways to tackle credit card debt:
- Debt consolidation: Combine outstanding debts into one new loan, potentially lowering your interest rate.
- Negotiating with creditors: Work out payment plans with your credit card issuer. Some may be willing to let you pay for a portion of your debt upfront and forgive the rest, while others may set up a structured payment plan for a period of time.
- Credit counseling: Seek advice from non-profit organizations that aim to educate and provide guidance to debtors.
These solutions may be viable when your credit card debt is still manageable. However, if it seems unlikely that you will be able to pay, bankruptcy can be an option. It is not for everyone, but it can offer debtors a fresh start. An experienced bankruptcy attorney can help you assess if this path is right for you.
The weight of mounting debt can take a toll on anyone. However, you have options, and there are ways to move forward.