If you have credit card debt, you’re not alone in the struggle to pay it down. In the third quarter of 2024, active credit card accounts only making the minimum payment reached a 12-year high. That’s not surprising given high inflation and the average credit card interest rate hovering at 20.10% as of February. If repayment seems like a never ending cycle, you may want to enroll in a debt management plan (DMP).
Here are signs you should try a debt management plan in 2025:
You Can’t Pay Back Your Loans Within Five Years
If you’re unable to pay back unsecured debt like credit cards, and personal loans, within five years, you may want to look into ways you can consolidate your debt or make an appointment with a certified credit counseling agency. This is especially true if you’ve taken measures to cut spending and are still struggling to pay back your loans. The longer it takes you to pay back your loans, the more you’ll end up paying.
Your Balance Keeps Going Up
If your balance doesn’t seem to be shrinking despite regular payments, you’re not paying enough to make an impact against your interest.
You Can’t Make the Minimum Payment
You should always pay the minimum payment each month. Late or missing payments past 30 days will impact your credit score, and it will be harder to get good interest rates if you need a loan in the future.
Creditors Are Calling
Creditors only start calling when you’re delinquent for more than 30 days. If you’re getting phone calls and letters in the mail, it’s usually a good indication that you need to find a debt relief option that works for you.
Why a debt management plan?
When you enroll in a debt management plan through a credit counseling agency, you’ll work with a certified credit counselor. Your counselor will work with your credit card companies to consolidate your debt into one monthly payment while typically lowering your interest rate, making it easier to pay back your loans. DMPs are designed so you can pay off your debt in three to five years, making it a manageable plan to get you back on track and out of debt.
Let's Get Started
Make a FREE online appointment to discuss your options