The average American household has around $5,331 in credit card debt according to CreditDonkey. As sad as this is for me to admit, for once in my life I am above average because up until recently the credit card debt in our household was closer to $12,000. And that was a heavy load for me to carry, especially since I am the one who handles all the administrative functions of our house, including paying the bills in a timely manner.
And while my husband was aware of this debt, I always felt like the pressure was entirely on my shoulders. He checks the mail but throws it on the counter and I handle the rest. And every time I would open a credit card statement, I would get a huge pit in my stomach. With interest rates increasing and no end in sight of ever getting our mountain of debt paid – not to mention my lingering student loan debt – I knew I had to do something.
Luckily we belong to a credit union. I hear and see information about debt consolidation programs all the time on the radio and commercials on TV, but since I knew my credit union offered debt consolidation as a free service, I figured I had nothing to lose by researching it a bit. Since I made the decision to condense all my creditors into one (essentially), my mind has been more at ease whenever I see those statements show up in our mailbox.
I can’t speak for all debt consolidation programs, but I can say that since I signed up for this program last December, I feel like a burden has been lifted off my shoulders. It is actually a very easy process as well.
The company my credit union uses is Green Path Financial Wellness. With my permission, they withdraw a negotiated payment twice per month from my checking account. The peace of mind that comes with this is astounding because I don’t have to worry when each bill is due – Green Path pays my creditors for me. Just as long as the money is in our checking account when they make their withdrawal.
The first step in signing up with their consolidation program was to allow Green Path to run my credit to see every creditor listed on my credit report. And since all the credit cards were in my name (because yes, I do all the shopping, too) this made things a tad easier. We also discussed if there were any cards I wanted to keep off the repayment plan. The one thing about debt consolidation is that you can no longer use the credit card that is in the repayment program. For me, this was hard, but ultimately it needed to be done.
It took about one hour of my time in total to go over each credit card and decide whether or not it would stay in the repayment plan. They also asked me our usual living expenses and took this into consideration when calculating what we realistically could afford to pay each month. After that initial conversation, they would then reach out to each creditor to negotiate (on my behalf) a monthly payment amount. Once everything was approved, I could then go to their website to monitor my account and progress. And bonus, I even have a due date as to when all our debt will be paid.
This process has taught me how to be better with credit cards. We all know how easy it is to save 10 or 15% any time you visit your favorite department store and they tell you how you can “save today” if you sign up for their credit card. And these offers are always enticing, which has led me to the predicament we are in. I take full responsibility for our debt. Though my husband always approved our purchases, I will also admit to whimsical shopping when we didn’t necessarily need something – I simply wanted it.
If I stay on track, all of our debt will be paid off by November 30, 2022. It seems like a long time from now, but having a set end date gives me the best peace of mind. I have a goal and know I will stick to it – I have to – for my sanity and the betterment of my family.