Don’t Ignore Your Credit Card Debt – NBC Connecticut

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Let’s face it, we are all affected by inflation.

High prices make it easy to get a credit card or miss a payment, but experts are warning consumers that increasing your debt can add to your potentially frustrating and stressful financial situation.

Money Management International (MMI) is one organization that can lend a hand.

It is the largest non-profit credit counseling and housing agency in the United States, where educators primarily offer free or paid online and telephone services.

Whatever the financial stress – debt, credit score issues, housing instability, bankruptcy – MMI educators like Thomas Nitzsche are ready to respond.

“Just about any of those sorts of big life decisions or scary financial things that you might be going through, we have educators and counselors who can guide you through that process,” Nitzsche said.

Sometimes there are economic factors that impact our portfolio that we cannot control, such as when the federal authorities raise interest rates, as they have done recently.

Did you know it can also increase the interest rate on your credit card?

“Each time this happens, the interest rate on variable accounts like credit cards goes up, often without your knowledge, because banks aren’t required to tell you about it,” Nitzsche said.

So while interest and minimum monthly payments can go up, so can delinquencies, Nitzsche points out to people — don’t ignore your financial situation.

“The average interest rate on a credit card should be around 20% by the end of the year. And when it gets to that level, if you’re someone who’s hanging on, and maybe not able to make good progress in debt repayment, it can be very difficult to progress then that so much of that payment is going toward interest. So you really need to start looking at ways to increase your payments to the card as well as lower the interest rates on the card,” Nitzsche said.

MMI experts say you shouldn’t let your debt skyrocket. Do your research, ask questions, or talk to them to figure out what’s the best path for you – whether it’s better budgeting skills, maybe, a credit card with balance transfer, a debt consolidation loan or even a debt management program to lower your interest rate.

Nizsche said a typical customer carries about $18,000 in credit card debt. On average, MMI clients deleverage in four years.

“So by lowering the interest rate, having a fixed monthly payment, and having that budget under control, it really helps people, you know, to grow and be successful in the long run,” Nitzsche said.

Nitzsche said about one in five MMI clients to contact them are in medical debt, and many of those people didn’t know there could be financial help available at nonprofit hospitals, so it’s worth it. ask lots of questions about your situation.

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