Is inflation ruining your budget? That’s no surprise with inflation at 5% during the 12-month period ending in March. While it’s lower than the record high in 2022 when it reached 8%, it’s still more than two times higher than the Federal Reserve’s agreed-upon sweet spot of 2% for inflation.
That all said, with the cost of goods and services taking up more room in your budget than normal, and possibly causing your credit card balance to inch higher as your discretionary income becomes less available, a debt management program may be able to help.
What Is a Debt Management Program (DMP)?
A debt management program is a repayment plan for unsecured debts, like credit card debt and medical debt, that allows you to condense your payments and pay them off more quickly.
Inflation vs. Interest Rates
Inflation measures the rate of which the cost of goods and services goes up. As prices rise, the buying power of the dollar decreases. To combat high inflation, the Federal Reserve raises interest rates, which also impacts credit card holders. Currently, the national average credit card interest rate is more than 20%, making it possible that on top of high inflation, you’ll also feel the impact of higher-than-average interest rates.
How Can a Debt Management Program Help?
When you enroll in a debt management program, a credit counselor will work with you and your lenders to reduce your monthly payments into one monthly payment that works for your specific budget, as well as reducing your interest rate, typically between 6%–10%.
Bottom Line
Through a debt management program, you’ll see your payment and interest rate go down, which can help you budget more easily and save you from taking a hit on your credit score as you wait for inflation to level out. Since DMPs are designed so that you can pay off your loans in three to five years, repayment is quick and efficient.
Debt Management Plan: Enroll Today!
One monthly payment | lower interest rates | no more debt collector calls | improved credit score