WPXI Pittsburgh: Americans turning to debt counseling as credit card balances rise nationwide
MMI is one of the nation’s largest nonprofit credit counselors and last month, our advisors saw a 68% year-over-year increase in new clients. MMI’s Thomas Nitzsche and MMI client Edidiong with Kristin Garriss at WPXI Pittsburgh about how to dig out of credit card debt.
Transcription:
And credit card debt hitting record highs. We're talking $10,000, $20,000, even $30,000 per person.
“Wow, that's a lot of money.”
Yes, it is.
Next, how some people are digging themselves out of debt. Happening right now, Americans have more than a trillion dollars of credit card debt, and now more and more people are turning to debt counseling to get it under control. Channel 11's Kirsten Garriss tells us how it helped one grad student dig her way out of thousands of dollars in debt.
I mean, David, just imagine being $350 short in your budget every single month. Financial advisers say that's the reality for so many Americans, and they're relying on credit cards to make up the difference. In just a year, that can quickly add up to thousands in debt.
“Hi, Professor…” Edidiong Obot is working on her second master's degree at Georgetown University, and like many students, she has faced student loans and credit card debt.
“It was somewhere between $30,000 and $50,000 in debt, and when I say that out loud, I'm like, ‘Wow, that's a lot of money.’” That's when Obot says she got advised to try debt counseling. "I felt like a relief because I wasn't being judged."
Financial experts tell me her story is becoming more common. Money Management International is one of the nation's largest nonprofit credit counselors. Its advisers have seen a 68% increase in clients over the last year, and now people in their 20s make up the largest group. "As these student loans have gone back into repayment, we think that that's creating some additional pressure on that age group."
The nonprofit offers free credit counseling, and for a small fee, you can work with their advisers to create a debt management plan. "We reduce the interest rates down to about 7% overall across all creditors, um, and put you on a plan to be debt-free within four to five years.”
“Thank you for meeting with me…”
And in just three years, Obot paid off her debt and increased her credit score by 60 points. She tells me the process changed her relationship with money. "I look at money now as more of like a tool and a resource, um, and not to abuse it, but you know, how do you be a better steward of it?"
And, David and Lisa, you know, some people might be wondering, "How can I do this?"
Financial advisers tell me that most credit card companies will actually work with you to try to bring down that interest rate, and some of them even offer financial hardship programs.
Live in Washington, Kirsten Garriss, Channel 11 News.
