In the first half of 2023, credit card interest rates have steadily climbed, so the national average is now more than 23%. Given that lenders can raise your interest rates for missed or late payments, now is not the time to continue the struggle in silence. A credit counselor can help enroll you in a debt management plan, so that you can get out of debt and reduce the amount you’re paying in interest.
According to a GoBakingRates survey, around 30% of Americans have between $1,001–$5,000 in debt, 15% have more than $5,000, and 6% have more than $10,000—which means millions and millions of people in the U.S. currently have credit card debt and may be paying large amounts of interest. If you’re one of those people and you want to stop, make an appointment with a certified credit counselor.
When you meet with a credit counselor and they agree that you’re a candidate for a debt management program, they’ll sit down with you and make a budget. This budget will include a combined payment schedule they can use to work with your lenders. Payments are typically reduced 30%–50% from what you’re currently paying, so that It’s affordable to your specific situation.
Paying tons of money in interest can slow down repayment. Your credit counselor will talk to your lenders and about lowered interest on your payment. Often, they can get it down to between 6%–10%, although in severe cases they might bring it down even lower. Because you’re still paying your debt back in full, you won’t be negatively impacted and can reap the benefits of reasonable interest rates.
Debt management plans are designed so that you can pay off your debt in three to five years. As your credit utilization ratio (the balance between what you owe and how much credit you have available) diminishes, you will see your credit score get better.
Paying large amounts of interest can only make paying back your debt that much harder. A debt management plan can help not only reduce your monthly cost, but your interest rate—setting you on a path to better financial health.
Knowing your options can help you prepare your finances for the next step, whatever that may be.
Make a FREE online appointment to discuss your options