Solving Debt When You're Living on One Income
Opening credit cards helped keep Jacky and her husband stay afloat during the pandemic, but $10,000 of racked-up debt meant calling in the professionals.
Solving debt amidst a pandemic may seem counterintuitive, but there are solutions that have helped some people whittle their credit card debt down. As a result of a slowdown in consumer spending, moratoriums on evictions and foreclosures, as well as stimulus checks, consumers have been able to pay down their debts to some extent.
On the other hand, many lost their jobs because of the pandemic. Some families had to adjust to living on one income; and unfortunately for Jacky, this was about to become her reality.
The challenges made themselves known…
The pandemic took its toll on Jacky and her husband’s finances when Jacky had to stop working because of an autoimmune disease. Her husband became the sole breadwinner.
“My husband was the only one working. So, now we had gone from two paychecks to only one, and not only that, before COVID he was working a lot of overtime and during COVID all the overtime stopped.”
With very little funds coming in, Jacky took it upon herself to open a few credit cards to help keep them afloat. It’s a common story with people who end up facing challenges with credit card debt.
“I would constantly open up another card and another card just to try and keep up. It was just a vicious cycle. You pay the card and a week later you’re using the same card again.”
By the time Jacky decided they needed help, she and her husband had racked up close to $10,000 of credit card debt.
Financial stress was running high…
“Before calling Consolidated Credit, I was anxious, stressed. I didn’t know how we would come up with the money to pay the bills, deciding which one I should pay. I was really, really anxious.”
Anxiety got the better of Jacky. She was scared by how much they were spending just to pay off their debts. As she flipped channels, a commercial caught her eye:
“I had been thinking about getting debt help with Consolidated Credit for a while and at that particular moment, I just happened to be watching TV and was free to pick up the phone. What made me call was that commercial made it more of a point of managing debt, managing your things, debt management.”
After speaking with a certified credit counselor, she knew she had made the right decision. Soon enough, she would not even have to think about the credit card bills.
“I was just saying to my husband the first payment went through and I don’t even have to think about those credit cards, and not even going on the computer and say OK, let me go pay bills.”
Getting professional help…
Once Jacky and her husband were enrolled in Consolidated Credit’s debt management program, our team of experts worked with creditors to lower the interest rates on the four credit cards Jacky enrolled in the program. And just like that, Consolidated Credit was able to provide Jacky and her husband guidance with a three-year plan to eliminate their debts—not just the credit cards, but some personal loans.
“I was actually paying $330 a month on one loan. And I’m going to tell you that now I pay the credit cards together ($335) for all my cards and the loan.”
Trying to negotiate lower interest rates with creditors is a great way of getting a handle on your debts. But you may want to call the professionals in to help get you the lowest rates. On average, Consolidated Credit works with creditors to reduce interest rates between 0-10%. The rates were dramatically lower than what Jacky and her husband had been facing.
“I had one loan that was about 36%,” she says. “I had another credit card that was about 40%. So they were very, very, very high interest rate cards. Now my interest rates are very, very, very low.”“I don’t have to worry about the bills. I know it’s going to be taken care of on the first of every month, so I make sure the money is there and that’s it.” – Consolidated Credit Client Jacky O. #debtfree Click To Tweet
Freeing yourself from the grip of debt…
Jacky and her husband have set their sights on moving once they find the right opportunity. Their dream is to leave everything behind in New Jersey and start off fresh in Florida once they have accumulated more funds.
“Hopefully things will be better next year so we can actually move to Florida and see where we go from here.”
Because of her immunocompromised condition, cooking has become difficult for Jacky. As a result, Jacky and her husband were spending large sums eating out. Instead, they now try to find simple recipes that her husband can cook.
“It has really opened my eyes to how much we really spend on eating out. So, it’s more something to make it simple for my husband to cook; it’s just showing us to go grab something from the shopping center instead of ordering out. We’re watching a little bit more where the money is going.”“I absolutely, definitely would recommend Consolidated Credit. In fact, I already have to my daughter.” — Consolidated Credit Client Jacky O. #creditcounseling Click To Tweet
Jacky gives us a breakdown of her best takeaways from working with Consolidated Credit:
- Don’t continuously open up another card.
- Try to manage the debt that another card has given you.
- Speak to someone who can help you manage your budget.
- Pay attention to how much you are spending on restaurants, subscription services, etc…
- Don’t use your cards just to get reward points. It is a vicious cycle.