Paying Off Over $55k in Credit Card Debt

Getting rid of credit card debt can feel impossible, but it’s achievable

For many, getting on top of credit card debt can be difficult, especially when it spirals out of control. In 2020, consumer debt in the U.S. rose to $4.1 trillion. Revolving debt, in particular, which largely comes from credit cards set a record high reaching $1.099 trillion [1].

People use credit cards for anything from leisure spending to paying everyday bills. Using them for such purposes isn’t bad, but trouble comes when you lose track of your spending or unfortunate circumstances arise. Both scenarios can lead to credit card dependence and mounting debt.

Credit cards can seem like the only solution when you’re facing financial difficulties. However, when used the wrong way, they can make your situation far worse.

A.B. is familiar with this struggle, as she found herself with more credit card debt than she could handle.

After losing two jobs in a row, A.B. used credit cards to get by…

Middle aged woman reviewing her bills while talking on the phoneLosing your job often throws your finances out of whack. Your income suddenly stops, but unfortunately, the bills don’t.

To avoid falling behind on payments, A.B. started relying on credit cards.  It was the only way she could survive a recession, home repairs, and rent.

“Over 5 years, losing two jobs in a row to corporation reorganizations led me to rely too much on credit cards. To make it worse, I needed to make expensive repairs to sell my house during a recession, still paying the mortgage and also paying rent to live and work out-of-state.”

She had 14 cards and amassed over $56,000 in debt…

Experian tells us the average American has four credit cards [2], but A.B. had 14. Despite having so many, she didn’t miss any payments on her cards. She explains, “I had never missed or been late on any payments, but I came to realize that I was not reducing the debt at all.”

The issue was that she increased her credit card limits without considering how that would affect her interest rates. Higher interest rates mean the cost of borrowing is increasing and paying off principal balances becomes difficult. Until she was in knee-deep, A.B. didn’t realize her monthly payments weren’t high enough to lower her principal.

“With the ease of getting increased credit on each card and the increasing interest rates, it was easy to lose track of how little progress I was making on paying off the principal.”—Consolidated Credit Client A.B. #creditcounseling Click To Tweet

The average APR for all credit cards in the U.S. is between 15.53% and 22.76%. That means if a credit cardholder has a 22.76% APR and carries over a balance of $1,000 a month, they would be charged an additional $227.60 in APR annually. Higher balances also mean higher minimum payments. To get out of credit card debt, you need to move beyond minimum payments which can be difficult when you’re cash strapped.

Because of A.B.’s high APR and lack of income, she struggled to pay off her principal. She began feeling like she’d never be debt-free and was losing hope. When asked how she felt about her debt at the time, she said, “It was an overwhelming hopelessness that I would never be out of debt, even if I paid the payments each month and stopped using the cards.”

That is until her friend told her about a way out…

Thankfully, debt isn’t a death sentence, so there’s always a way out. In A.B.’s situation, her friend stepped in to save the day. She recounts how she found out about Consolidated Credit saying,

“A friend who’s a journalist had written articles about credit consolidation companies. She told me that Consolidated Credit had an excellent reputation and a real credit solution compared to other companies that were not honest about their programs.”

People are often skeptical about credit consolidation companies and, that’s understandable. Nobody wants to add hidden credit consolidation fees to an already insurmountable amount of debt. A.B., however, trusted Consolidated Credit to be transparent about their fees and guide her out of debt.

After she made the call, things started looking up…

Consolidated Credit worked with A.B. to reduce and where possible, eliminate the interest rates on her cards. They got some cards down to zero percent while others were reduced to one or two percent.

“I felt hopeful, and a bit relieved, even though it still seemed like it would take a long time. It almost seemed too good to be true that credit card companies would reduce or sometimes eliminate interest during repayment through Consolidated Credit.”

With time, her credit score began improving and so did her outlook on finances. She tells us, “I’m not sure of my beginning score. I started tracking it about two years ago and I’ve gone from around 690 to over 800.”

Considering the average credit score in the U.S. is 703, her accomplishments are worth celebrating.

A.B. is now more confident about managing her finances…

She has regained control of her finances and understands the fundamentals of responsible borrowing. Consolidated Credit has a program that helps clients manage debt which helped her get on track. Not only did the program help her reduce debt, it also equipped her with the financial skills she needs to manage on her own.

“I already feel secure that I will never be in that kind of debt again. It’s also a sense of gaining freedom over my finances–making my money belong to me again and not the credit card companies.”

A.B. also notes that Consolidated Credit didn’t make her feel judged or like a debtor, as most credit card companies have. The companies referring to her as a “debtor” despite never missing a payment is something she found discouraging.

Conversely, Consolidated Credit made what can be a grim situation positive and gave her something to look forward to. “It’s like Consolidated removes the stigma of getting into debt and replaces it with a positive plan that brings an increased sense of accomplishment each month.” — Consolidated Credit Client A.B. #creditcounseling Click To Tweet

4 Years and 3 months later A.B. is celebrating being debt-free

Going from over $56,000 in debt to becoming debt-free must be an exhilarating feeling. That is what A.B. has achieved with the help of Consolidated Credit. She’s also become accustomed to budgeting and saving, so there’s no going back now.

A.B. has seemingly mastered the key to healthy finances—budgeting and financial planning. She says the program has taught her the importance of consistent money management and it’s something she’ll continue doing after it’s complete.

“After paying everything off, I am going to continue putting the monthly payment away in savings and PAY MYSELF! My goal is to save and buy a new car without any financing. Even during the program, I have consistently saved at least some amount each month.”

As hard as it can be, putting money aside to pay your credit card bills every month is essential if you want to avoid debt. You can never tell when unforeseen expenses may arise, so it’s good practice. Knowing you have money stashed away gives you peace of mind and helps you maintain good credit.

She has advice for anyone with stubborn credit card debt…

“It’s much harder to stay in debt and juggle all the bills each month than it is to take the first step and make the initial call to begin down a positive path. Once you are in the program, it immediately feels like a huge burden is lifted, even with the monthly payments. Having the one monthly payment gives you back a lot of time and removes that monthly anxiety of seeing all your money drained away. The one monthly payment becomes a positive step instead of feeling like a constant trap.”

She also advises people to avoid misusing credit cards in the process of trying to gain reward points. Although they can help you save, it isn’t worth going into debt over.

“The lure of credit cards is very deceptive, and it’s designed to be easy. They focus on “rewards” or “money back” but the rewards never come close to the emotional and financial cost of that debt. Consolidated Credit helps you break the cycle.”

A.B. recommends Consolidated Credit to anyone in debt…

“It’s a great service to help get out from under crushing debt. They provide a clear pathway and answers along the way. I’ve always received very knowledgeable answers whenever I had a question. Very easy to work with and always professional.”

Contact us today if you’re ready to eliminate your debt.