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Peninsula family pays off $57K in credit card debt, offers advice as interest rates rise

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Posted at 12:19 PM, Sep 06, 2022
and last updated 2022-09-06 18:01:21-04

NEWPORT NEWS, Va. - As Renee Macklin and her family were moving to Newport News, their finances spiraled quickly.

"I think a lot of it was moving costs are so expensive," she said. "There was just a lot of stuff that was not getting paid due to necessity and that really quickly makes you feel like you're drowning."

They put a vehicle purchase, deposits, rent, and more on credit cards.

"[It caused] a lot of stress, and a lot of nightmares and a lot of feeling like you're doing something wrong all the time," she said.

Like a lot of families, they couldn't keep up with the creditor calls or high interest rates and ultimately racked up about $57,000 in debt.

There wasn't an end in sight for the family of five until they heard about Money Management International, a non-profit credit counseling agency.

"I look at their entire financial situation to see what they have going on what their goals are, what they're wanting to do," said Marla Puckett.

Marla Puckett is a certified credit counselor and explained how easy it is to fall victim to credit card debt.

"You see a lot of that in the ads, you know, 'buy now pay later.' Well, 'later,' doesn't mean you're paying back that $250 purchase, that means you're paying back a $375 purchase once you add in that interest," Puckett said.

Bankrate predicts the average credit card interest rate will reach nearly 20% APR by the end of the year, which is a record high. Estimates show that could add as much as $4,500 in interest charges for people who only make their minimum payment.

"There's literally four options that anybody has that they can utilize to take care of their financial situation," she said.

Puckett listed the following as ways to take control of your credit card debt:

  1. Debt consolidation
  2. Debt management plan
  3. Debt settlement
  4. Bankruptcy

The Macklin's opted for the debt management plan and paid down $57,000 worth of debt in four years.

MMI contacted their creditors, negotiated interest rates/terms as well as monthly payments. All the Macklin's had to do was be honest with their finances and stick to the plan.

Renee said her family got their lives back and you can too.

"Oh my gosh, it was super surreal [when we submitted our final payment.] We had been so excited and waited for so long. We had been like counting down like the payments so the last payment it was so, so amazing," she said.

Puckett said the key to debt-free success is to create strong spending habits including, but not limited to, paying off your balance on-time and in-full, only purchasing what is a necessity, and being cautious of signing up for rewards cards.

The Federal Reserve meets again at the end of September and experts predict rates will go up again.