My husband and I talk a lot about saving money and building wealth here on the blog but I want to remind you all that we haven’t always had our financial act together. In fact, when we met 6 years ago, we both had student loan debt, car loans, and some credit cards with balances larger than we’d like to admit.
After nearly committing financial suicide by purchasing a large home we couldn’t comfortably afford we decided it was time to take charge of our money.
A couple of taps on the keyboard led us to a few personal finance blogs that inspired us to get our butts in gear and our money on track. We launched Mad Money Monster in 2015 to help keep us motivated and accountable. And I can say beyond a shadow of a doubt that it has worked!
Even though we’re not deep in debt anymore, we certainly remember how hopeless it felt and how happy we were when our situation started to turn around.
If you happen to be in a similar situation with debt and don’t know where to start, check out these great tips from our friends over at Debt.com!
Just because you’ve been turned down for balance transfers and personal loans, it doesn’t mean you’re destined for bankruptcy.
This post is sponsored by Debt.com.
America is drowning in debt – and credit cards are dragging us down.
According to statistics from Debt.com…
- We owe more than $1 trillion on our cards. That’s enough to buy every NFL, NBA, NHL, and Major League Baseball team in the country.
- Nearly two-thirds (over 65%) of us carry monthly balances. We’re paying the credit card companies staggering interest rates each month.
- We owe enough to buy our families food for a year. The average household owes more than $16,000 on their credit cards.
And while a common narrative is that people run up credit card balances with frivolous spending, the reality is that most people facing challenges with debt didn’t have any other options. Stagnant incomes, rising prices and the ever-increasing cost of living are leaving millions of Americans living paycheck to paycheck. Then, when a disaster strikes, these individuals are forced to go into debt just to stay afloat.
Meet Diane, a single mom who found a solution…
That’s the type of situation that Diane faced after she lost her job. She was out of work less than two months, but as a single-mother of two she was already stretched thin with no emergency savings to fall back on. So, when she her company laid her off, all her bills, groceries and other necessities went on credit because it was the only choice she had. It was a major setback that she’s still working to recover from.
Once she got a new job, Diane was optimistic that she’d be able to catch up. But getting ahead of her credit card debt proved to be harder than she’d anticipated. Her new job was covering all the expenses in her budget, but there wasn’t much left after that. She didn’t have any extra cash to make more than the minimum payments on her credit cards. And anytime an unexpected expense came up, she was forced to put that on a credit card, too. So, instead of regaining stability and control over her debt, her balances were slowly getting higher.
Don’t wait to get the help you need. Talk to a certified credit counselor to find the best way to pay off credit card debt in your situation.
Things got worse in 2017 when interest rates started to rise. The Federal Reserve raised interest rates three times in 2017 and another four times in 2018. Since almost all credit cards have variable interest rates, consumer interest rates gradually increased. And anyone with high balances like Diane also saw their monthly minimum payment requirements increase as well.
As a result, Diane was forced to start juggling bills just to make ends meet. There were some months where she just couldn’t keep up with everything. She finally realized that her strategy wasn’t working and that she needed to find a solution. So, she started to look into debt relief options online.
Diane’s problems continued…
That’s when Diane ran into another problem that her challenges with credit card debt had created. She’d only missed a few payments on a few credit cards, but those little missteps had dropped her credit score by over 100 points. She got rejected when she applied for a balance transfer credit card. Then she got rejected on a debt consolidation loan, too. Nobody was willing to extend her any new credit, so any do-it-yourself solution was off the table. If she wanted to avoid bankruptcy she needed help.
What to do when low credit scores limit your options…
This isn’t an uncommon situation. Only 30% of Americans have credit scores that are considered excellent (750 and above); another 13% have a score that is considered good (700-749). But that leaves more than half of Americans (57%) with fair-to-poor credit ratings. So, while do-it-yourself debt solutions exist, they don’t work for a large percentage of the population who don’t have the credit score necessary to qualify.
Diane worried that she was headed for bankruptcy, which would just set her credit back even more. But after seeing a commercial for Debt.com, she decided to make one last attempt to find a solution. She spent about 30 minutes on the phone with a representative reviewing her situation. By the end of the call, she had a solution that would pay off her debt. It wasn’t going to solve her problems overnight, but she finally had peace of mind that she’d be able to become debt free without going through bankruptcy.
If this situation sounds familiar, call to speak with a certified debt specialist
At Debt.com we don’t just offer one solution – in fact, we don’t actually offer any solution directly. Instead, we work with a range of accredited financial service providers, so we can match you with the best solution for your unique financial situation. With one simple, free consultation with one of our debt resolution specialists, you can develop a customized plan to get out of debt that fits your goals.
Debt.com offers a free evaluation to help you understand your options, then they connect you with accredited service providers that can help you get the help you need. You can also call 844-213-9902 to speak with a certified debt specialist immediately.
How long will it take you to become debt-free?
Use Debt.com’s free credit card payoff calculator to see how long it will take you to pay off your debt with minimum payments.
