It’s no secret that inflation is high right now. Food, gas, housing, and recreation are just some of the areas where you might have felt it hit your wallet. In 2022, the U.S. experienced the highest inflation rate in 40 years at 8.2%. While the turn of 2023 has seen inflation start to drop, with current rates hovering around 5% for the 12-month period as of March, this only means that price hikes are slowing—but the rate of inflation is still more than two times higher than the 2% that’s considered healthy.
To bring inflation down, the Federal Reserve has had to increase interest rates—with the current national average interest rate on credit cards higher than 20%. Between this and higher prices for goods and services, keeping credit card balances down can pose a challenge. Waiting for the economy to even out may not be an option, which is why participating in a debt management program may help you take charge of your finances and fight back against inflation.
What is a debt management program?
A debt management program is a repayment plan for unsecured debts, like credit card debt and medical debt, that allows you to condense your payments, so you can pay it off quickly and affordably.
How can a debt management plan help you fight against inflation?
When you enroll in a debt management plan, you’ll work with a credit counselor who will go over all your household expenses and help you create a budget. They will then negotiate with your lenders to consolidate your loans into one affordable monthly payment. During this process, your counselor will also work to reduce your interest rates, typically between 6%–10%.
The best way to combat inflation? Pay off your credit cards, so that your debt doesn’t get even higher. By reducing your payments and interest rates, a debt management program can help you weather the impact high inflation has had on increasing credit card debt and your overall cost of living—so that your credit score doesn’t suffer for it.
Benefits of Debt Management
One monthly payment | lower interest rates | no more debt collector calls
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