Americans owe a collective $930 billion dollars in credit card debt. In South Carolina the average per card holder is more than $5,600. And that’s just the plastic. So we looked into how you tackle rising debt. Here is what you can do if you need help and what to watch out for in this 7 News Consumer Watch.
When three of six people in the Tuttle family were hit with health problems in same year, the medical bills lead to tens of thousands in debt.
“When i got out the hospital, there were late fees on this and late fees on that, and when you have late fees, there’s just no catching up, not when you’re living paycheck to paycheck to begin with,” said Amanda Tuttle.
She looked for help and found it in the non-profit, Clearpoint.
“We usually work with the creditors directly to hopefully be able to wave late payments, wave all the limit fees, and also be able to reduce their interest rates and sometimes even have the account be aged. and those are the things that we can do if they decide to enroll in a debt management plan,” said Tamika Garrett, a Clearpoint Counselor.
“Before Clearpoint got involved, our monthly payment was a little over $1300. After Clearpoint got involved, it got down to a little over $700, and I mean just that difference was amazing,” said Tuttle.
“One warning, this industry has a lot of scams in it, so make sure if you do get help, you use a company that’s accredited by the national foundation for credit counseling.”
The legitimate companies will not likely advocate bankruptcy, or settling your debt, since those moves affect your credit and taxes.
Instead, for a small monthly fee, they’ll help you set up a budget and a repayment plan that is sustainable.
Tuttle says the most helpful part of the process is being able to be in the loop on every step of the process.
After less than a year, Tuttle has managed to pay off nearly three thousand, and is confident she will be debt free by the end of her five-year plan.
“So all in all, it feels really really good again,” she said.
Clearpoint says, on average, debt management clients reduce their interest rates on credit cards by half and the total monthly payments by 20%.
Within the first 3 years they usually increase their credit score by 100 points. If you go with a credit counselor look for non-profits that are in good standing with the better business bureau.