Updated: Aug 18
We're here to chat about a hot topic that's been making waves lately: the remarkable surge in credit card debt, rising to a record-breaking $1 trillion of US credit card debt this 2023 summer. Yep, you heard that right – a trillion with a 'T'.
Let us break it down and talk about what you need to consider to keep you smooth and steady.
Picture this: credit card balances soared shooting up by a whopping $45 billion during the second quarter of 2023. That's nearly 4.6% growth, landing at an impressive $1.03 trillion, according to the folks at the Federal Reserve Bank of New York. And hey, we get it – life can get expensive in 2023. But let's be smart about how we paddle these waters.
Sure, it's tempting to dip into your 401(k) when the tides get tough, but hold on a second. While some folks might be tapping into their retirement savings (and any and every place you can find personal funds), it's important to consider the bigger picture. Think of your 401(k) as a treasure chest that you've been diligently filling over the years. Borrowing against it might seem like a quick fix-- it might help in the short term, but you'll be missing out on long-term gains that can build a sturdy financial future. And don't forget, any company matching that may be occurring is "free money" you will not want to pass on for your future.
Why the hesitation? Well, interest rates have taken off and are sky-high, and that means your debts are getting pricier to repay. Averaging around 20.53%, credit card interest rates are no joke. So, while you might be navigating through some choppy waters right now, don't let the allure of a quick fix steer you off course. Instead, consider alternatives like debt consolidation that can help you streamline your repayments, reduce those high interest rates, and keep any retirement treasure chests intact and growing.
Remember, even in the face of record-breaking credit card debt, there is help. We are here for you. With the right strategies and a little help from BFF's like us, you can weather this storm and emerge even stronger on the other side. Remember, steer clear of borrowing against your 401(k), and navigate towards a future that's financially secure and full of promise. Let us know if we can help you!