As of late 2018, Americans had a total of $3.93 trillion in consumer debt when not accounting for mortgages. California residents and other Americans are expected to add another 5 percent in credit card balances throughout the rest of the year. Therefore, it is believed that consumer debts will eventually hit $4 trillion in the near future. While it only took five years to go from $3 trillion in debt to $4 trillion, it may not be cause for alarm.

This is because Americans have saved about $2.5 trillion more than they have accumulated in debt since 2008. It is also worth noting that homeowners have more equity in their properties than they did in 2008. Of course, it doesn’t mean that individuals shouldn’t keep an eye on their own spending habits. It is worth reviewing card balances and interest rates to ensure that debt stays at a reasonable level.

Reviewing account details also helps a person determine if interest rates have gone up on one or more card balances. The average interest rate has increased to 16.6 percent from 13.6 percent in 2016. This translates to about $120 in extra interest on a credit card balance of $4,000. It is thought that rates will continue to climb, which means that Americans may pay even more to lenders each month.

If a person is having trouble keeping their debt in check, it may be worthwhile to file for bankruptcy. In a bankruptcy case, an individual may be able to retain property or equity in property. It may also be possible to receive an automatic stay from creditors. In a Chapter 13 case, payments are made to creditors over three or five years. Unsecured debt balances may be discharged after the repayment period is over.