Credit card debt slows down the economy
Updated: Wednesday, 20 Feb 2013, 11:27 PM EST
Published : Wednesday, 20 Feb 2013, 10:42 PM EST
Published : Wednesday, 20 Feb 2013, 10:42 PM EST
FORT WAYNE, Ind. (WANE) - Experts are seeing a nine percent increase in people that are at least 90 days late on their credit card payments in the last three months of 2012.
"It's a lot easier to charge and think that, 'hey, it's going to go away,' but it really doesn't go away it just builds that interest each and every month," said Jason Meyer, Director of Business Development of Financial Hope Counseling and Education.
As the interest continues to build, the consumer will have to spend more money to get out of debt.
"Middle class Americans are one paycheck away from financial disaster. And that just comes from not planning ahead," said Meyer.
Meyer's job is to help individuals and families budget and work with their creditors to get them out of debt. Meyer works with the creditors to lower interest rates and possibly their principle amount for the debtor. Most times, there's a payment plan set up. When most of someone's income goes to becoming debt-free, that can take a strain on the economy.
"The day of reckoning comes, though, when those people get in over their heads, have to stop spending and have to start paying back. And that will slow the economy down," said Doug Meador, University of St. Francis Economics professor.
Meador and Meyer both agree education is key when comes to learning about an individual's or family's finances and credit.
Experts said another reason for the increase in late payments is because banks have been giving out more credit cards to those with less than decent credit.
"It's a lot easier to charge and think that, 'hey, it's going to go away,' but it really doesn't go away it just builds that interest each and every month," said Jason Meyer, Director of Business Development of Financial Hope Counseling and Education.
As the interest continues to build, the consumer will have to spend more money to get out of debt.
"Middle class Americans are one paycheck away from financial disaster. And that just comes from not planning ahead," said Meyer.
Meyer's job is to help individuals and families budget and work with their creditors to get them out of debt. Meyer works with the creditors to lower interest rates and possibly their principle amount for the debtor. Most times, there's a payment plan set up. When most of someone's income goes to becoming debt-free, that can take a strain on the economy.
"The day of reckoning comes, though, when those people get in over their heads, have to stop spending and have to start paying back. And that will slow the economy down," said Doug Meador, University of St. Francis Economics professor.
Meador and Meyer both agree education is key when comes to learning about an individual's or family's finances and credit.
Experts said another reason for the increase in late payments is because banks have been giving out more credit cards to those with less than decent credit.
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