Have your credit card payments become difficult to make each month? Are you moving money around, putting off another bill, or wondering how you will cover everything before the next payday? Or maybe you are making every payment, but the balances do not seem to go down.
High interest rates can make it hard to keep up with your credit card payments, even when you’re doing your best to pay down the balances. It can feel like you are doing everything you can and still not getting very far.
If that sounds familiar, a debt management program may be worth considering.
Your payments could start making more progress
Through a debt management program, a nonprofit credit counseling agency works with your creditors to request lower interest rates. Rates and terms depend on each creditor, but when less money goes toward interest, more of your payment goes toward what you owe.
You still repay your debt. The goal is to make those payments more effective and give you a path to paying it off, typically within three to five years.
You have one monthly payment to manage
Keeping track of several credit cards, due dates, and minimum payments can be stressful. With a debt management program, you make one monthly payment to the agency, and the agency sends payments to the creditors included in your plan. That can make your monthly bills easier to manage.
You do not need to wait until you are behind
I talk with people who make every payment on time but see their credit card balances becoming harder to manage. You do not have to miss a payment to ask for help. Looking at your options now may give you more room to make a decision that works for you.
You can find out whether the payment fits your life
This is the part that matters most. A debt management program has to work alongside your housing, groceries, utilities, and other expenses. A payment that looks good on paper will not help if you cannot realistically make it each month.
When you meet with a counselor, you can review your whole budget and get an estimate of the monthly payment and payoff time. If the program is not a good fit, the conversation can still help you understand your options.
There are a few things to ask about before enrolling. Credit cards included in the program are generally closed, and the interest rates and terms vary by creditor. Your counselor can walk you through what the program would look like for your accounts.
At Consumer Credit of Des Moines, our counseling is free and confidential. We will talk through your situation and answer your questions. You can get a free estimate without any obligation to enroll.
If you are tired of making payments and wondering when you will finally see a difference, finding out whether a debt management program could help is a good place to start.
Written by Lisa Ohnemus
Director and Certified Credit Counselor
Consumer Credit of Des Moines