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Women and credit card debt

Some women who are living in Mississippi may struggle more than men to pay off credit card debt. A study found that more than one-quarter of women around the country said they were not confident they would be able to pay all their bills in a month compared to 14 percent of men. Furthermore, just under one-third of women who had credit cards said they had paid the balance in full one time or less in the past six months compared to 20 percent of men.

There are a number of reasons for this. A major problem is that their median wages are 80 percent of what men make, so it takes them longer to get out of debt. Single mothers in particular struggle because they often do not make enough to make ends meet and must rely on credit. This is the case even in a time when the economy is strong and unemployment is low. Many women may also be less informed about finances than men. Women's magazines do not tend to write about financial literacy as much as magazines aimed at men, and women's clothing stores may encourage using credit to get discounts.

Strategic use of credit cards contributes to good credit rating

People paying off debts in Mississippi often stop using credit cards and switch to making purchases with cash. Although this is an appropriate way to tackle debt, careful use of credit cards does help people maintain their credit ratings. Credit cards that offer reward points provide consumers with multiple advantages when paid in full every month.

An active credit card account that's in good standing could help a person secure a low interest rate when financing a car or home. This benefit emerges after cultivating an excellent credit history on the same account over the long term.

Credit card debt settlement an option for some consumers

Part of a credit card agreement is that the Mississippi cardholder will pay back charges, plus fees and interest. In some cases, though, credit card companies have incentives to lower the amount outstanding, or they realize it won't be worth it to pursue the cardholder with collections efforts. For people who are going through serious financial hardship, it may seem impossible to get out. If it is approached correctly, debt settlement can be a way to satisfy these types of obligations.

Some debt settlement companies give poor advice at times, though, like advising clients not to communicate, pay or work with creditors. This can be a dangerous tactic, and most cardholders will get more out of calling their credit card companies directly or asking an attorney to communicate with creditors on their behalf.

Financial scammers could target your elderly loved ones

Your parents worked hard all their lives to save for a retirement that would ensure their comfort in their golden years, as well as to build a nice nest egg for their children and grandchildren to enjoy after they are gone. It would break your heart to discover they were victims of scammers who are determined to separate them from the assets they spent a lifetime building. Unfortunately for many residents of Mississippi and elsewhere, there are many financial scams that target the elderly and the vulnerable.

According to the National Adult Protective Services Association, about one out of every 20 senior citizens in the U.S. is a victim of financial scams or of people they know and trust. Your parents may have been intelligent and financially savvy throughout their lives, but sophisticated cons and declining mental acuity can make them easier targets in their senior years. The following scams are common against the elderly and the mentally vulnerable:

  • Fake calls by scammers pretending to be IRS agents or utility companies, demanding immediate payment and saying the victim faces fines or arrest if he or she doesn’t comply
  • A trusted caregiver, sometimes a family member, who has the elderly person sign over control of the finances or makes him or her the sole beneficiary of a will
  • Emails falsely claiming to be a relative or friend who is in desperate need of money
  • Viruses that shut down a computer and direct the user to a con artist who says he or she can fix the computer for a fee
  • False sweepstakes or lottery notifications that require an upfront fee before the “winnings” will be paid

Small medical debt can cause big trouble

Most Mississippians know that large medical bills can cause serious financial problems. However, even small bills of less than $1,000 can be sent to collection agencies and end up as negative entries on credit reports. In fact, a recent study published in Health Affairs found that more than half of medical collections in any given year are for less than $600. More than 2 percent of adults also had medical collections of less than $200 on their credit reports in 2016.

Even though older people have more medical problems, young people are more affected by medical debt, according to the study. Men and women in their late 20s are three times as likely to have a medical bill sent to collections than people in their late 60s. One cause of this is Medicare, but research also shows that medical debt declines as adults get older before being eligible for Medicare.

Millennials in major cities struggle with debt

Debt is a problem for most millennials in Mississippi and in other states. In 50 large cities across the United States, millennials are carrying an average of over $23,000 in personal debt excluding mortgages. San Antonio is the area with the largest average non-mortgage debt for millennials at $27,122 followed by Pittsburgh and Austin.

Student loans account for the largest proportion of debt in the U.S. for individuals age 22 to 37 followed by credit cards. Car loans are another major source of debt for millennials. One problem faced by many is that even in areas where the cost of living is low, wages are also lower.

Baby boomers find that retirement dreams don't always come true

Baby boomers in Mississippi who always dreamed of early retirement might have to get used to the idea of late retirement or no retirement at all. At least that it is what statistics suggest. More people 55 and older are still working these days, and many who have retired from full time jobs are turning to freelance work to supplement their retirement income. As of 2017, 23 percent of the American workforce was aged 55 or older. The Bureau of Labor Statistics estimates that the figure will be a solid 25 percent by 2024.

The 2008 recession didn't help baby boomers who were planning on a timely retirement, but poor planning could be another reason they are working longer. According to a survey by Bankrate, 58 percent of Americans don't even know how much money they will need to retire. People are healthier and live longer than previous generations, but that means they need more money in retirement. To supplement their incomes, many people who have retired are doing freelance work. In 2016, more than 25 percent of the self-employed workforce was aged 55 or older, and more than half of those people were 65 or older.

Financial mistakes and bankruptcy

In the 2017 fiscal year, individuals in the United States filed a total of 767,721 personal bankruptcies in the federal courts. Residents of Mississippi may benefit from learning about some common mistakes people make that may lead them to file for bankruptcy.

For example, overspending with credit cards is a major culprit as many individuals do not have an updated budget that is based on what they really need. Not having a well-developed budget means that individuals are unaware of how much disposable income they have and what they can buy without having to incur any debt. It also means that they are unaware of how much money they can actually borrow and repay within a sensible amount of time.

Senior citizens are particularly vulnerable to bankruptcy

One of the most vulnerable groups in society when it comes to filing for bankruptcy is senior citizens. This group is increasingly filing for bankruptcy due to a variety of factors, including mounting credit card debt, high medical expenses, and insufficient savings and retirement funds.

Senior citizens facing these debilitating debts and expenses must make a choice about how to overcome their financial struggles. Often without employment to help aid their income, they have few options. However, bankruptcy is a viable choice for many of these people.

What to do when facing foreclosure

When Mississippi homeowners fail to make mortgage payments, they could face foreclosure. This means that the lender has decided to take possession of the home. However, there are ways that a person can end or delay the process. The first step in the process is to read any letters that the lender sends as they may offer information about avoiding a foreclosure.

Ideally, a homeowner facing foreclosure will talk to the lender as soon as possible. In many cases, the lender would rather work out an alternate payment plan as opposed to actually going through with a foreclosure. It may be possible to have the loan refinanced or have late payments rolled back into the loan. Depending on a person's financial situation, it may be worth looking into bankruptcy to stop or delay the foreclosure process.

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O'Brien Law Firm, LLC
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Southaven, MS 38671

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