Miami has racked up a special honor. It’s not the kind of accolade anyone really wants, but it is significant and especially of note in this economy. Miami is now the number one city in the country with the fastest growing credit card debt.
According to Forbes magazine, Miami’s credit card debt has increased 8.6% over the last year. There are a few reasons that this might be the case, but experts are pointing to the recovery of the Miami housing market as driving the increases. The housing market had a slow, long, tough recovery from the last recession, housing prices were flat, and people nested as they waited for their home values to recover. Now that homes are moving again, so are people, and was moving into a new home, a lot of expenses for furniture, furnishings, and the necessities that all homeowners share.
Of course, without the data, everyone could simply be jumping to conclusions. We don’t have proof that people are going to IKEA in greater numbers because they have recently purchased a home. Nor do we have proof that they are visiting the garden centers en masse to purchase lawnmowers and hedge clippers. We do know that the unemployment rate in Miami-Dade County as a whole has fallen from 12.4% in August 2009 to 4.7% as of February 2018 – meaning that people who have long put off unnecessary purchases are paying with plastic instead of cash. Whatever we want to believe, or what spin the experts are putting on these numbers, Miami’s rank as the city with the fastest growing credit card debt is of concern not only to consumers but to banks who study the data and adjust lending models accordingly. In other words, living in a city with a lot of credit card debt could make it harder for you to get a loan of any type.
It’s easy when in hard times to get into survival mode spending habits. You put everyday expenses on your credit card because you must buy groceries, get gas, buy diapers, and do all the things you must do every day when you don’t have the cash. Getting into a cycle of debt means that you never really get out of debt. You’re so busy paying off one card while increasing the balance on another or relying on short-term loans to stay afloat while you pay off the outrageous interest on your balances. This type of not-a-plan is not good for your fiscal future or your stress levels. If your credit card debt is eating your life, it’s time to get a grip on it once and for all.
Getting a handle on credit card debt and out of control debt in general means being serious about the program. First, you need to gather all your debts in one place. Get your paperwork organized for the following:
1. Medical bills. Medical bills are still one of the biggest causes of bankruptcy. They can be overwhelming, and they can also be completely opaque. In an emergency, there is no such thing as comparison-shopping an MRI. The good news is that medical bills can be negotiated, and some transparency in pricing obtained.
2. Automobile and other vehicle loans. Sometimes a car is a necessity, especially in an area where public transportation is not living up to its full potential. At other times boats, RVs, motorcycles, ATVs, jet skis, and other vehicles are just toys – and expenses that come with other expenses. Fuel and insurance cost money, and so does storage. It may be time to cut the extra fun stuff loose until finances are under control
3. Mortgage. It has taken a while since the last recession for home values to rebound. If you have been able to stick it out through the mortgage crisis and a slow recovery of real estate values in Miami-Dade, you deserve some applause. You may also deserve a second look at your mortgage so that you can negotiate a payment that is more reflective of your home’s current value.
4. Student loans. Whether the loans are yours or you took out Parent Plus Loans to cover your kids’ educational expenses, this can be some of the toughest kind of debt. The loans are not transferable to your kid, but under specific circumstances, they can be forgiven or discharged.
5. Credit cards. Since Miami is the city with the fastest growing credit card debt, this type of debt deserves special attention. There are all kinds of gimmicks on the Internet that tell you how to pay down credit cards using other credit cards, promising easy loans to consolidate credit card debt, and cards created specifically for balance transfers so that you can pay off your plastic with plastic.
Getting a picture of your entire debt also shows areas where you trim, nip, and tuck to reduce your expenses. Once you get lean and mean, tackling the debt is easier. With the money saved by trimming extraneous expenses, working up a budget, and sticking to strict spending rules, paying down debt is not going to be fun, but it is potentially easier.
There are times when not even the strictest financial discipline can make a dent in your debt. That is when getting a grip on debt becomes less of a DIY project and more of a “need professionals now!” situation. When you are swamped with debt, and uncertain about how to move forward, it is time to consult an experienced attorney who handles both debt matters and bankruptcy. Don’t be afraid of the B-word; bankruptcy is a last resort guaranteed by the Constitution for people who are overwhelmed with their debt. An experienced attorney can tell you if you need to take the route to bankruptcy, or if less drastic measures will suffice over time to reduce credit card and other debts. Call the experienced people at Van Horn Law Group in Fort Lauderdale and West Palm Beach and set up a free initial consultation. We are open seven days a week at convenient hours to help you.