Money Management International debt hits record high

More than 60,000 individuals enrolled in Money Management International's debt management plans now carry over $1 billion in credit card and personal loan debt. This is the highest total the national nonprofit has recorded in 13 years.

Ted Rossman of Money Management International attributes the surge to inflation, high interest rates, and the rising cost of living. He noted that households are straining under these pressures, mirroring the financial stress seen after the 2008 crisis. Many clients are placing everyday expenses like groceries, gas, and car repairs on credit cards because prices have jumped about 30% since 2019.

Rossman pointed out that even working households with pay raises often find their income insufficient to cover rising costs for gas, groceries, housing, medical bills, and child care. The organization is seeing a return to the difficult financial numbers that followed the financial crisis, indicating widespread budget strain.

The credit counselor advised that people struggling with debt should not wait to seek assistance. He said, "Definitely speak up, ask for help, don't be ashamed." Rossman argued that the stigma surrounding credit card debt is unfortunate because the debt often results from practical necessities rather than irresponsible spending like vacations or shopping sprees. He emphasized that medical bills, car repairs, gas, and groceries are the usual culprits.

Rossman stated that half of credit card holders carry debt from month to month. He suggested that the key to breaking this pattern is working with a nonprofit credit counselor, taking out a personal loan, or using a zero percent balance transfer card to consolidate and pay down debt.

The nonprofit continues to serve its current client base as the total debt figure remains at a 13-year peak. Rossman maintained that removing the shame from the process is essential for helping households manage their finances effectively.