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GET OUT OF DEBT WITH NO REGRET

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Americans Owe Nearly $1 Trillion In Credit Card Debt

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DISCLAIMER: As the COVID-19 public health situation evolves, new regulations are being continually issued. This page/story/information may not include the most recent information.

BY BRIAN WALLACE ON JULY 23, 2020

In February 2020, the Federal Reserve found that Americans have reached a record high for the amount of credit card debt owed. On top of that, charge-offs and past-due payments among 18-29 year-olds is rapidly rising.

To top it off, we’ve entered the worst economic recession in modern times. The pandemic shuttered many businesses, and two-thirds of Americans are working from home while many don’t have the option. Everyone is feeling the financial squeeze, especially Millennials who entered the workforce in the previous recession and have never fully recovered financially.

With more than 3 in 4 Americans having at least one financial regret, fiscal illiteracy is seemingly normal in the United States. Perhaps it’s a matter of mindset – which is built on whether you see your own character, intelligence, and abilities as fixed or capable of growth. However, it’s never too late to learn.

A fixed mindset is simply a stuck mindset. Your viewpoint on life will translate into how you navigate through it. Having a fixed mindset may limit your growth. For instance, someone with a fixed mindset may feel threatened by the success of others, or may even ignore constructive criticism. It’s also common for those with fixed mindsets to avoid challenges and failure, making them likelier to give up on tasks and situations with ease.

Why? Because those with fixed, or stuck, mindsets desire to look smart or skilled compared to others.

On the other hand, those with growth mindsets look toward the future. Optimistic individuals thrive on new learning experiences, making them eager to learn and find inspiration in others’ success. In other words, individuals with a motive to grow will accept and learn from constructive criticism, and embrace their challenges in life.

Why? Because those with growth mindsets see setbacks as opportunities. They have the desire to learn and improve themselves.

Even during an economic downturn, we can work to better ourselves so we come out the other side better and stronger. If you are out of work right now, there is no better time to start learning how to prepare yourself financially for the next economic downturn.

Knowing this, it’s important to grow your financial literacy. Simply talking about finances can help you learn. Currently, 53% of Americans feel anxious when thinking about money – and for younger adults aged 18-34, it’s 63%. On top of that, more than half of Americans regret not saving more, and of those, most regret underfunding their retirement accounts, emergency funds, and education for their children.

Still, less than 1 in 3 Americans are able to identify at least 3 basic financial concepts by the age of 40. Only 60% understand borrowing and only 35% understand risk, but 73% feel confident about their ability to achieve their financial goals. How are people doing so?

Technology lends a great deal of help. 39% use websites or apps to help with financial tasks. For example, apps like Cleo track your spending habits, quizzes, financial knowledge, and roasts users for overspending. Similarly, apps like Earnin drive users to celebrate their success by depositing into a virtual “tip jar” to save money.

However, there’s no trick like simply knowing your debt, weighing your options for repayment and consolidation, and taking action. If you’re unsure where to start, simply check your credit report to obtain a list of your current debts.

Following this, there are multiple routes you can take in tackling your owed payments. Regardless, just be sure to pay at least the minimum on all loans open.

In 2020, Americans owed $14.15 trillion in total household debt, $1.64 trillion in student loans, and $1 trillion in credit card debt. Although financial mistakes seem to come with the package of being an American, it’s never too late to change.

The recession will be over before you know it, and it’s up to you to choose whether you come out better on the other side. Find more information on growth mindsets for financial literacy below.

Published in ConsumersLife and News

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Michigan license number:   DM-0016282 Available to the public and licensed in Michigan.

Section 13(1)  When a licensee establishes a debt management plan for a debtor, the licensee may charge and receive an initial fee of $50.00

Section 13(2)  A licensee shall attempt to obtain consent to participate in a debt management plan from at least 51%, in number or dollar amount, of the debtor’s creditors within 90 days after establishing the debt management plan. If the required consent is not actually received by the licensee, the licensee shall provide notice to the debtor of the lack of required consent and the debtor may, at its option, close the account. If the debtor decides to close the account, any unexpended funds shall be returned to the debtor or disbursed as directed by the debtor.

Sec. 14. (1) A contract between a licensee and debtor shall include all of the following:

(a) Each creditor to which payments will be made and the amount owed each creditor. A licensee may rely on records of the debtor and other information available to it to determine the amount owed to a creditor.

(b) The total amount of the licensee’s charges.

(c) The beginning and termination dates of the contract.

(d) The principal amount and approximate interest charges of the debtor’s obligations to be paid under the debt management plan.

(e) The name and address of the licensee and of the debtor.

(f) Any other provisions or disclosures that the director determines are necessary for the protection of the debtor and the proper conduct of business by a licensee.

Sec. 18. (1) In addition to the fee described in section 13(1), a licensee may charge a reasonable fee for providing debt management services under a debt management plan. The fee under this subsection shall not exceed 15% of the amount of the debt to be liquidated during the express term of the plan.

(2) A licensee may offer a debtor the option to purchase credit reports or educational materials and products, and charge a fee to the debtor if the debtor elects to purchase any of those items from the licensee.  Fees charged under this subsection are not subject to the 15% limitation on fees described in subsection (1).

(3) Except for a cancellation described in subsection (4), in the event of cancellation of or default in the performance of the contract by the debtor before its successful completion, a licensee may collect $25.00 in addition to any fees and charges of the licensee previously received by the licensee. This $25.00 fee is not subject to the 15% limitation on fees and charges under subsection (1).

(4) A contract is in effect when it is signed by the licensee and the debtor and the debtor has made a payment of any amount to the licensee. The debtor has the right to cancel the contract until 12 midnight of the third business day after the first day the contract is in effect by delivering written notice of cancellation to the licensee. A cancellation described in this section is not subject to, and a licensee shall not collect, the fee described in subsection (3).

(5) If a debtor fails to make a payment of any amount to a licensee within 60 days after the date a payment is due under a contract, the licensee may, in its discretion, cancel the debt management contract if it determines that the plan is no longer suitable for the debtor, the debtor fails to affirmatively communicate to the licensee the debtor’s desire to continue the plan, or the creditors of the debtor refuse to continue accepting payments under the plan.

(6) A licensee shall not contract for, receive, or charge a debtor an amount greater than authorized by this act. A person that violates this subsection, except as the result of an inadvertent clerical or computer error, shall return to the debtor the amount of the payments received from or on behalf of the debtor and not distributed to creditors, and, as a penalty, an amount equal to the amount overcharged.

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877-999-6442

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