America has a growing medical debt problem. The United States Census claims that 19 percent of households cannot afford medical care.
The Census also says the median amount of debt was $2,000. Medical debt is particularly devastating because it often leads to bankruptcy and the forced neglect of other medical treatments.
Some factors influence the likelihood of medical debt. Education is the largest corollary to unpaid medical bills. Over 26 percent of households without a college degree suffer from some level of medical debt. However, education above a bachelor’s degree does not necessarily decrease the likelihood of debt.
Individuals with fair to poor health have a much greater rate of medical debt. Still, over 14 percent of healthy households cannot pay for medical bills. These families are at significant risk if an unforeseen medical emergency happens.
High medical debt afflicts only four percent of the US population. The Census measures high medical debt as liabilities over 20 percent of a family’s annual income. The primary factor that contributes to high medical debt is poverty. Households that cannot afford health insurance are nearly three times more likely to accumulate high medical debt. Clearly, the combination of poverty, lack of prospects, and poor health create a snowball effect that seems impossible to alleviate.
Medical debt does not have to be a life sentence. Start by educating yourself about the various tools and resources available to people who suffer financial difficulties. Take the first step today, and start working towards a debt-free future.
Many people living in Mississippi and around the country struggle with being able to pay off holiday debt. However, experts do have some possible options for individuals who would like to pay off their debt more efficiently.
One suggestion is to simply reduce costs. Many families set limits on how much they will spend on gifts for immediate family and agree with friends and extended family to avoid gift exchanges and instead get together at each other’s homes for holiday snacks and well wishes.
For those who do opt to purchase gifts, there are several strategies for paying off holiday credit card debt. The first is the debt snowball or its variation, the avalanche. In a debt snowball, individuals pay off their smallest credit card and then apply the money saved on that payment toward the balance of another card. This provides debtors a sense of accomplishment as debts are erased.
The debt avalanche is a different approach, which involves prioritizing debts with the highest interest rate. While this requires debtors to put off the pleasure of eliminating a debt entirely, it is often a more fiscally prudent option and costs less money over time.
Other options include taking out a personal loan at a low interest rate to pay off all credit card balances. Similarly, it may be possible to find a low-interest credit card that allows the transfer of high-interest balances. In both cases, however, consumers must be able to manage their existing finances so that they do not create an even larger debt on the new credit card.
Individuals who are concerned about money issues may be able to find debt relief through these methods or bankruptcy. An experienced attorney may be able to review a client’s case and make recommendations as to the appropriateness of a specific strategy.
Research from CompareCards.com found that credit card debt may be a bigger problem than student loans for many millennials in Mississippi and around the country. Among those who participated in the study, 67% reported having credit card debt while only 36% had student loan debt. It found that among individuals in this age group who had credit cards, only 13% had no debt. Furthermore, about a quarter of respondents said that they would die in debt regardless of how old they currently were.
Among those who made such a claim, 16% had an annual household income of $100,000 or more. Women were more likely than men to say that they would likely pass away still owing money to creditors. However, the average millennial respondent said that he or she would be out of debt by age 49. Parents who had children under the age of 18 were more likely to have credit card debt compared to those who had no children at all.
Across all groups, 70% of respondents who owed money to a credit card company had at least one other debt. Financial professionals recommend that those who are in debt take any action necessary to pay it down. In many cases, putting even a few extra dollars a month toward a debt can make it more manageable in the long run.
Individuals who are experiencing financial difficulties related to credit card or other types of debt may want to consider bankruptcy. Filing for bankruptcy may entitle a person to an automatic stay of creditor contact. This means that a debtor won’t receive phone calls or letters related to an outstanding balance. Other benefits of bankruptcy could include extra leverage to negotiate new home or auto loan terms or the ability to discharge certain unsecured debts quickly.
Many women in Mississippi are struggling with costly credit card debt, even more than men in the state. Of course, people in general have accumulated significant debt associated with revolving consumer credit. According to one study, total credit card debt has hit its second-highest point following the financial crisis of 2008. In one quarter in 2018 alone, people accumulated another $30 billion in consumer debt. Still, women have shown more anxiety about their credit card balances than men. One study said that over one-fourth of women participants were not confident that they could pay off their cards compared to 14% of men.
One factor is the generally lower incomes that women have. Women have 80% of the median annual income of men, which means that women may have greater struggles in getting out of credit card debt. While the median salary for a woman is $41,554, the median for a man is $51,640. In addition, 20% of men said that they had only paid their credit card balances in full once or never in the last six months. Over 30% of women said the same, meaning that they are accumulating larger amounts of interest charges as a result.
Other experts drew attention to the number of single mothers providing for their children. Single moms may be more likely to turn to credit cards to cover expenses for their children and may also struggle to make up the money to pay off their bills. They may also be less able to take on additional work to make more money due to the cost of childcare.
People of all backgrounds are struggling with creditor calls, costly fees and other aspects of insurmountable credit card debt. They may wish to consult with an attorney about their options for debt relief, including credit counseling, debt consolidation or personal bankruptcy.
Americans owe a total of $1.4 trillion in student loan debt as of the first quarter of 2019. That figure was provided by Experian, and it represents a 116% increase in student loan debt over the past 10 years. While this has caused a financial burden for many young people, it is not the only form of debt that they have.
Research has indicated that individuals between the ages of 23 and 34 have more credit card debt than student loan debt. Collectively, Americans repaid $38.2 billion in credit card debt during the first three months of 2019. However, WalletHub says that individuals will put another $70 billion on credit cards during 2019 alone. Currently, Americans owe over $1 trillion to credit card companies. Financial professionals point to many reasons why individuals rely so heavily on credit cards and are struggling to repay their balances.
Monetary policy and a relatively weak dollar relative to inflation are popular theories as to why credit card debt is increasing. Low interest rates and more money in circulation generally results in prices going up and the value of the dollar staying flat. However, some believe that if Americans were better educated about the financial consequences of credit cards, they would be able to more effectively manage their debt.
Individuals who are facing financial challenges related to credit card or other types of debt may have ways to overcome them. One option may be to file for Chapter 7 bankruptcy. Doing so may make it possible to have certain unsecured debts discharged without making any payments. Other benefits of bankruptcy may include putting at least a temporary stop to creditor contact.