Helping Americans Struggling With Rising Monthly Debt Payments
In January, the Federal Reserve made unprecedented interest rate cuts to stave off what many experts feel is a looming recession. Most consumers had hoped that these reductions would help them pay down the nearly one trillion dollars in credit card debt they’re struggling with from month to month. Unfortunately, the Fed’s rate cuts are producing the opposite effect – banks are actually raising interest rates for consumers. The result may prove disastrous for many.
A few months ago, a consumer carrying an $8,000 balance on a credit card at 15% interest was probably facing monthly payments of roughly $180. If that interest rate increases next month, let’s say to 28%, the new minimum payment would be $266.67 – an increase of 48%. That’s a budget buster for most families, especially those straining to meet their mortgage payments.
Most consumers would be surprised to learn that there already are some options available to them. For example, some people are able to renegotiate their interest rates directly with their credit card companies. A reputable credit counseling agency can advise you how it’s done. Others may only need to prioritize their debt, or to learn how to apply basic budgeting strategies to create savings or adequately fund their retirement plan.
For more information, visit cambridgecredit.org