COLUMBUS, Ohio — The average Ohioan is carrying $6,300 in credit card debt, according to Lending Tree analysis in the third quarter. It’s up 2.3% from the previous quarter.
This comes as Americans in general are seeing an uptick in credit card debt. The Federal Reserve Bank of New York reported it increased by $27 billion to reach $1.14 trillion in the second quarter of this year.
Consumer 10 spoke to one Columbus teacher who, at one point, was carrying close to $35,000 in credit card debt.
David Little says he and his wife were living in Arizona at the time, and shortly after their marriage they welcomed their first baby.
“She had some complications from the surgery for the baby. We had started having some medical debt pile up,” said Little. “Then we moved into a house where we were renting… the utilities and things like that were a lot more than we're expecting. And so being a teacher off for the summer, I wasn't getting paid, and she was laid off, so we just had a bill starting to accrue.”
After trying to consolidate credit cards, David Little was unable to get ahead of the debt. He eventually found Money Management International and took advantage of the free counseling.
“Each year, we help about 200,000 people across the country achieve financial goals, like paying down debt, buying a home, avoiding foreclosure,” said Thomas Nitzsche, the vice president of Media and Brand at the non-profit MMI. “Something breaks down in the house, car breaks down, medical problem, something happens to basically push them over the edge, and then at that point, they typically get referred to as often by their creditor, from a friend or family member. “We're typically working with people that are under quite a bit of financial stress, sometimes in a really stressful situation, or even some sort of financial crisis.”
Here's how it works: MMI takes a look at a financial snapshot of your life, including your debt sources, challenges and your goals, free of charge.
“We help work with their creditors, reduce the interest rates, usually into the single digits, to help them make progress on paying down their debt so that more of their payment is going towards principal rather than interest,” said Nitzsche. “We're the only type of organization that can help somebody reduce their existing interest rates without creating a new line of credit and without going into default or bankruptcy.”
Little told Consumer 10 that without a counselor and debt management program, he would still be facing financial difficulties.
“We looked at the debt, the credit cards that we had, and she used it as a teachable moment… and here's how we're going to pay it off,” said Little.
Now Little is left with a previous student loan and car payment but was credit card debt-free in five years.
“On average, our clients are with us for about four years,” said Nitzsche. “On average, they increase their credit score about 84 points along the way, and on average, they repay about $20,000 to $22,000 in debt over that period of time. So you can imagine, once they're able to put that money towards another financial goal, instead of sort of digging themselves out of past expenses. It obviously really improves their financial snapshot going forward.”