Struggling with credit card debt makes balancing your everyday life harder, in addition to the stress it can create. Average credit card interest rates continue to be high (24.45% as of September), so it may be more challenging than ever to pay them down.
If you’re struggling, you’re not the only one. J.D. Power recently reported that 51% of Americans can’t pay off their balance each month, while the Federal Reserve reported that in the second quarter of 2023, Americans are now holding more than $10,000 in credit card balances—up 4.6% from Q1, putting credit card levels higher than $1 trillion for the first time ever.
With credit card debt and interest rates at an all-time high, it’s time to get your budget in order. And if you need help, a debt management plan (DMP) is a step in the right direction.
What’s a Debt Management Plan?
A debt management plan is a program provided by credit counseling organizations designed to help you pay down your credit card debt in three to five years.
How to Enroll
The first step is to make an appointment with a credit counselor, which you can usually do in person, over the phone, or via video chat. They’ll typically need to see your complete financial picture, so they can help you create a budget. Your counselor can also get you started by enrolling you in a DMP.
How Does a Debt Management Plan Work?
A credit counselor will work with your lenders to consolidate your debt into one affordable monthly payment while also working with your creditors to get your interest rates down. When you make your monthly payment, you’ll often pay it to the credit counseling agency, which will pay your lenders for you.
Benefits of a Debt Management Plan
Not only will you benefit from lower interest rates and a definitive goal for repayment, but with on-time monthly payments and as you reduce your balances, you may see your credit score creep up. With a DMP, you’ll be supported by professionals who can help you stay on track, allowing you to manage your credit card debt and overall finances through economically challenging times.
Benefits of Debt Management
One monthly payment | lower interest rates | no more debt collector calls
Make your no-obligation - FREE - counseling appointment now