Did you know that more than 100 million people living in the U.S. today have credit card debt over $1,000? While it depends on your specific financial situation, holding a credit card balance that’s over 30% of your available limit is considered too much debt. And if you have too much debt, then you most likely will be swimming in interest rates higher than you can manage.
If you’re paying too much interest and are burdened with credit card debt, a debt management plan can help you cut your interest rate and pay off your debt in three to five years.
High Interest and Debt
According to LendingTree, the current national average interest rate for credit cards is more than 23%. Missed or late payments may result in your lenders hiking your interest rate even more, penalizing you with late fees, and your credit score taking a hit—making it even harder to pay off your debt.
Enrolling in a Debt Management Plan
To enroll in a debt management plan, you first must make an appointment with a credit counselor. They can help you create a budget and come up with a repayment plan, which they can then use to work with your lenders. A part of this will be combining your credit cards into one affordable monthly payment, with the reduced payment about 30%–50% less than what you were previously paying. On average, people in debt management programs can see their interest rate drop between 6%–10%.
Bottom Line: Pay Less in Interest
Once you’re enrolled in a debt management program, you’ll need to stop using credit cards, but you’ll now be paying back the debt you owe without the burden of unreasonably high interest rates. As your credit utilization ratio (your available credit versus what you owe) goes down, your credit score can recover—for a healthier financial future.
Benefits of Debt Management
One monthly payment | lower interest rates | no more debt collector calls
Make your no-obligation - FREE - counseling appointment now