How a woman paid $24,000 in credit card bills
NORFOLK, Virginia – The cost of living exceeds many people’s income. With inflation and high interest rates, paying off debt can be difficult.
Heather McAfee, a former Suffolk resident, understands this firsthand. The mother-of-two said life has been busy and quite expensive over the years.
“It’s very difficult when you have two children who depend on you,” she said. “The financial stress has been very difficult.”
Five credit cards later, McAfee was left with $24,000 in debt.
“It kind of really forced me to take responsibility for my finances,” she said.
She communicated with the people of International financial management, a non-profit credit counseling agency. She said they helped her pay off her debt in two years.
“We want to understand what the complete financial snapshot of the person is, so we can make appropriate recommendations,” said Thomas Nitzsche, financial educator and senior director of media and brand at Money Management International.
Nitzsche said counselors look at every bill, including cable, internet and groceries, and decide what’s best for your lifestyle.
For McAfee, it was a debt management program.
“It’s a tough call because you have to write down every debt you have and just and to see those numbers in black and white you can’t, you can’t hide it,” McAfee said.
Advisors negotiate with creditors to lower interest rates and consolidate accounts into one monthly payment. From there, they develop a budget. McAfee, for example, paid around $650 per month.
So how much could you save with a debt management plan?
To give you an idea of what most consumers can expect to save with a debt management plan, however, here’s what the average customer saved in 2021, based on aggregate real customer data from MMI versus projected cost of minimum payments (defined as 1% of principal plus interest) without DMP discounted interest rates.
Nitzsche said the average customer also increases their credit rating by about 88 points.
“It’s usually the difference between poor and righteous or righteous and good. When someone completes their debt management program, they’re usually in a much better position to buy that car, buy that house, anything,” he said.
McAfee now owns Richmond and her debt is behind her.
“It’s the first time in my life I don’t have that pressure,” she said.
McAfee canceled their debt in two years because they ended up earning a lump sum, but the average customer cancels their debt in four years as long as they are disciplined and stick to their plan.
Debt management programs are not suitable for everyone, which is why the advisers offer you solutions. They help you with everything from consolidation to settlement loans and even bankruptcy.