If you're one of the millions of Americans with credit card debt, you could be in for some bad news: the federal government has recently instituted two interest rate hikes that mean you'll be paying significantly more over the life of your debt. For someone already struggling to keep up with payments, the added interest could be the proverbial last straw.
Usually, rising interest rates are seen as a good thing overall, for it means that the economy is strong. On an individual level, though, the added interest can be devastating. Rates have risen another quarter point, meaning that you will pay an additional $25 per year for every $1,000 in credit card debt you carry. Collectively, because the American credit card debt load is so high, we'll pay $1.6 billion in additional interest charges by the end of 2017 thanks to the higher interest rate.
If your credit card is one with a fixed interest rate, this may not affect you in the short-term. The great majority of accounts are on terms that include variable interest rates, however, so prepare to pay more. The increase will likely be seen quickly, as experts estimate it will only take a few billing cycles before higher interest rates have an impact.
For many people, particularly those who are living paycheck to paycheck and barely making minimum payments on their credit card debt, any change in interest could potentially be devastating. You might find yourself facing mounting fees and a penalty if you get behind on payments, and you could even be sued if that happens.
Don't face a debt collection lawsuit alone. An experienced debt collection defense attorney can ensure that the debt you owe is legitimate, and hasn't been improperly inflated, and may be able to negotiate a settlement on your behalf. You don't have to worry about losing your home because of overwhelming credit card debt, and debt collectors must abide by strict practices and procedures set by federal law. If debt collectors have been illegally harassing you, they might even owe you money instead; a debt defense attorney at our firm can advise you about your legal rights in a free consultation.