Debt counselors report $1 billion in unpaid balances

Creditors report that participants in Money Management International debt plans now owe over $1 billion in credit card and personal loan debt. This figure marks the highest level recorded by the national nonprofit in the past 13 years.

The organization currently serves more than 60,000 individuals. Many of these borrowers have shifted routine costs to credit cards. Prices for essentials like groceries, fuel, and vehicle maintenance have increased by roughly 30% since 2019.

Ted Rossman of Money Management International attributes the surge to inflation and high interest rates. He notes that these factors are putting severe pressure on family finances. The organization is seeing numbers similar to those following the financial crisis.

Rossman explains that wages are often insufficient to cover rising costs for housing, medical care, and child care, even for employed workers. He advises people to seek assistance immediately rather than waiting. He argues that shame often prevents borrowers from acting.

"Definitely speak up, ask for help, don't be ashamed," Rossman said. "There's such a stigma around credit card debt, which I think is unfortunate. There's this feeling that if you have credit card debt you did something irresponsible, right? A big vacation, shopping spree, no… in reality it's usually practical things, it's medical bills, it's car repairs, it's gas, it's groceries, so take the shame out of it."

Rossman states that half of all credit card holders carry a balance from month to month. He suggests several methods to break this cycle. These include working with a nonprofit credit counselor, securing a personal loan, or using a zero percent balance transfer card to consolidate debts.