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Credit card debt outpaces savings for one fourth of cardholders

Credit card debt often occurs from unexpected financial difficulties, such as medical bills or unemployment, and can result in people receiving harassing phone calls from debt collectors. Filing for bankruptcy can be an effective method of stopping these phone calls. The following story on national credit card debt will interest readers in Cleveland.

Bankrate released its financial security index in February, showing that 55 percent of consumers have less credit card debt than savings. The report from the financial services company also indicated that 24 percent of consumers have more credit card debt than savings. Interestingly, the Bankrate survey also showed that men had a 60 percent chance of savings outweighing their credit card debts, whereas the corresponding figure for women was 49 percent.

The founder of Consolidatedcredit.org pointed out that the recession that began in 2007 reduced credit card balances, although consumers still failed to change their savings rates. However, a report from the Department of Commerce shows that the average savings rate was 3.9 percent in 2012, which is a significant improvement over the average savings rate of 0.9 percent in 2001.

Anyone struggling with debt should realize that medical bills and credit card debts are not secured by collateral. Both Chapter 13 and Chapter 7 bankruptcies can eliminate these unsecured debts. It may also be possible to declare many household items as exempt from liquidation during a bankruptcy. The main thing people need to know when struggling with debt is that there are options to achieve a brighter financial future.

Source: CNBC, "One Quarter of US Has More Card Debt Than Savings," Sheyna Steiner, Feb. 25, 2013

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