Getting laid off can throw your financial world into a tailspin. A period of unemployment can drain any savings you have. Then you’re forced to rely on credit cards to get by until you find a new source of income.
It’s a story that’s all too familiar in the age of COVID-19. As of August, more than 58 million Americans had filed for unemployment. Many households have even faced situations where both spouses lost their job. And while the economy and job market are showing signs of recovery, millions of Americans are still struggling to pick up the pieces.
It’s a scenario that Vicky and her husband are all too familiar with. Three years ago, just as they were expecting their first child, she and her husband both lost their jobs. The factory they worked for downsized and they lost all their income all at once.
Luckily, there’s a program specifically designed to help people recover from these types of situations. It consolidates credit card bills into one affordable monthly payment while minimizing interest, so you can get out of debt faster. It also doesn’t create any negative items in your credit, making a full recovery even easier.
With no income, any savings disappears fast
“We had good jobs and we’d been doing everything right. We didn’t live extravagantly and we’d even been saving ahead of the birth of our daughter. But with no income all our savings was quickly spent on bills and needs.”
Vicki also faced another situation that some are dealing with during the pandemic – she needed to go to the doctor, but now she didn’t have insurance.
After a few months, Vicki’s husband found a new job, but by that point their debt was overwhelming. Vicki had never owed so much.
When you owe this much, it feels like you’ll never get out of debt
“I was constantly nervous about our finances,” Vicki says. “And even though I knew the situation wasn’t our fault, I felt ashamed.”
Just covering medical costs, needs, and other bills, Vicki and her husband owed over $10,000 when all was said and done. The minimum payments alone were over $400. And now they were trying to pay it back on just her husband’s new income.
“We’d make the payments every month and the balances barely moved. It was so frustrating I wanted to cry.”
Their balances never seemed to go down.
At an average APR of 20%, more than half of every payment made gets used to cover accrued monthly interest charges.
It’s true! If you’re only making minimum payments on your credit cards, most of the money gets spent to cover interest charges. This free minimum payment calculator can help you understand the time and cost involved in getting out of debt on your own.
A family member told them about a program that could help
“My husband’s cousin is the one that told us about Consolidated Credit,” Vicki says. “She said their program had helped her get out of debt in about four years and that she’d saved thousands in the process.”
“I was reluctant – I felt bad I needed help, but I swallowed my pride for our family’s sake and made the call.”
Speaking with a certified credit counselor put her at ease
“The counselor was extremely kind and helpful,” she recalls. “He explained everything to me – over and over again in fact – until we both knew I understood everything.”
The counselor provided a free, confidential debt and budget analysis. He helped Vicki evaluate her budget and they determined she and her husband would qualify for a debt management program.
“He said they could work with my creditors, who would agree to reduce or eliminate the interest charges applied to my balances,” Vicki says. “We would make one payment to Consolidated Credit and they’d distribute the payment to our creditors each month.”
Vicki was still skeptical, but she and her husband decided to give it a try. She was shocked at what the credit counseling team came back with after talking to her creditors.
The results were better than Vicki ever expected
“Our interest rates were cut to about 2% and we were going to be debt-free in just 60 payments,” she explains. “It was such a great feeling to know we were going to be able to pay everything back and be debt-free that quickly.”
While she’s been enrolled in a debt management program, the credit counseling team has been there to answer her questions and offer resources to help them plan for a better future.
“The counselors at Consolidated Credit have never made me feel bad about being in debt. There’s no judgment when I speak with them. I truly feel like my life is better financially for being on this program.”
The proof is in the numbers
With a total debt of $10,525, this table shows how much time and money was saved by enrolling in a debt management program with Consolidated Credit.
|Time to payoff||13 years, 8 months||5 years|
|Total interest charges||$6,188.51||$542.18|
In this case, the program cut the monthly payments by 56 percent, allowing them to become debt-free nearly nine years sooner and save over $5,600.
The future is looking bright now
Vicki and her husband are now twelve months away from being completely debt-free. They were able to use their first stimulus check to make an extra payment on their debt management program.
“The client services team helped us apply the extra payment to our plan, so we can be debt-free even faster. If we get another stimulus check, we’ll use it to pay the rest of the balance off. Then we can start a savings account for our daughter.”
Consolidated Credit has helped millions of people become debt-free!
Vicki’s story isn’t unique. Financial challenges caused by unemployment are a leading cause of credit card debt. In 27 years, Consolidated Credit has provided free credit counseling to over 10 million Americans and they’ve consolidated over $9.5 billion in credit card debt.
If you lost your job during this pandemic and now you’re working to recover, this program may be able to help. If you qualify, you could save thousands in interest charges and be debt-free in 60 payments or less.
If you have credit card debt that you’re working to pay off, Consolidated Credit provides a free confidential debt and budget evaluation. You can call (844) 329-7533 to speak one-on-one with a certified credit counselor. You can also use their free debt management program savings calculator to see how much you can potentially save with a debt management program.