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A Single Mom Finds Debt Relief Despite Budget Challenges

Dealing with credit card debt on one income isn’t easy, but there is help.

Single Hispanic mother and her son playing piggy back.

There are 14 million single parents in the U.S. raising 21.6 million children on their own.[1] Only about half of single moms are able to work full-time, while roughly one in three can only work part-time. Raising children on one income is tough and it often leads to high-interest rate credit card debt. From baby expenses to increasing costs as children grow, the stream of expenses seems endless. When income runs short, parents can be forced to use credit to cover the shortfalls.

It’s a situation that Josefina knows all too well. Even before her son was born, his father was barely contributing. As a result, she soon found herself struggling to make ends meet.

After having a baby and becoming a single mom, I thought my credit was going down the drain. But I contacted Consolidated Credit and here I am 3 years later with decent credit and no credit card debt.

Josefina was only able to work part-time when they learned she was pregnant…

“I was in school,” she says, “and then I became pregnant. I was only able to work part-time while I finished my classes.”

While she’d hoped that her son’s father would pick up the slack once the baby came, in reality, he contributed very little.

“I was still with his dad when I had my son,” Josefina explains, “but we were using my credit cards to do all the shopping for the baby. He would be like ‘Oh, pay with your credit card and I’ll give you cash later.’”

Unfortunately, later never came.

Her son’s father left her holding the bag…

“He left for another city,” she explains. “I was left alone because I stayed in San Diego.”

I became a single mom. That’s when I started being in credit card debt and missing due dates and getting all these late fees.

It’s a common thread with credit cards. When someone faces financial challenges, they use credit cards to get by. But as the balances go up, so do the minimum payment requirements. When someone is forced to juggle bills, credit cards are often the last to be paid. Those missed payments stack up, ruin your credit, and make it harder to dig out of the hole that the credit card debt created.

A TV commercial kept telling her there was a way out…

“I kept on seeing the commercial,” Josefina says. “My debt was getting higher, so I decided to call”

Josefina spoke with a certified credit counselor from Consolidated Credit. They provided a free debt and budget evaluation to see where she was. She had six credit cards and total debt of $7,000.

Since Josefina was employed and able to make monthly payments, the credit counselor recommended a debt management program.

“At first I was unsure how it was going to happen,” she says. “I wasn’t sure how the program worked and all that. I was like, why do I have to pay extra fees. And at the time, in the situation that I was in, I didn’t want to pay extra fees to anyone.”

The counselor answered all of Josefina’s questions. She explained that there are low monthly fees for a debt management program, which cover administrative costs. Fees are set based on your budget, total debt, and the state where you live. They are capped nationwide at $79 and, on average, most people pay about $49.

“Then I said, you know, it’s either I pay a fee to Consolidated Credit, which really isn’t high,” Josefina says, “or I can deal with the credit cards myself and keep paying all those late fees they keep charging.”

Josefina was happy to hear that if she enrolled in a debt management plan, the credit card companies would stop all late fees and penalties moving forward.

“So, I was like okay, I’m just going to go ahead and do it. And I’m really happy I did,” she says. “Just the fact that you guys were able to stop the late fees made a huge difference. Had I not gone through you guys, I would’ve just kept paying more and more and more and the debt would have gotten even crazier.”

After three and a half years, Josefina was debt-free…

“The debt management program was really helpful,” she says, “and I was really looking forward to making my last payment.”

Every time one of my credit cards was paid off, it was like a sigh of relief, a victory.

“When the last credit card was paid off, I was excited,” she recalls. “I was so happy. I took my son out to eat and got him a toy. And I spent money, but this time it wasn’t on credit.”

Josefina admits that she kept a credit card open so she could take advantage of the rewards. However, now she knows how to use it so she can avoid debt problems. She says the biggest lesson that she learned while she was enrolled was the importance of having a budget and how to maintain a good one.

The result has been nothing but positive for her credit, too.

“When I first called, my credit score was at 430,” she says. Since joining Consolidated Credit, she’s learned how to achieve and maintain a better profile. “Now, according to Credit Karma, my score is 667.”

She also took advantage of the free financial education resources that Consolidated Credit offered while she was enrolled.

“One thing that I also like from Consolidated Credit is the webinars that you guys hold,” Josefina explains. “They taught me about budgeting and smart spending. It’s really interesting and really helpful.”

Josefina’s advice for single moms? Don’t be afraid to ask for help!

“Help is out there,” she says, “so don’t be afraid to seek any help that you need. You won’t regret it.”

She also says that it’s important not to be down on yourself for getting into a bad situation with debt.

“Don’t be afraid to say, ‘Hey, I messed up. I should not have been using this money because it’s not really my money and now I need help.’”

If you’re overextended with debt, talk to a certified credit counselor for a free evaluation.

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