KSHB 41 reporter Megan Abundis covers Kansas City, Missouri, including neighborhoods in the southern part of the city. Share your story idea with Megan.
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A new report shows Americans now owe more than $1.14 trillion in credit card debt, an increase of $27 billion from 2023.
For the average consumer, talking debt with friends or family still carries a stigma.
KSHB 41's Megan Abundis spoke with a Bonner Springs family about what kind of debt they were under and how they were able to navigate it.
At their kitchen table, Steve and Michelle Lundberg listed out just a few of their budget categories in their weekly budget meeting.
"Giving, food, groceries, dining out, mortgages, taxes, house updates," Steve Lundberg said. "We've been married for about a year now."
But before saying "I do," Steve Lundberg was navigating debt of his own — too much of it to handle alone.
"I had one or two credit cards at that time," he said. "I opened up more and got a couple of loans, then my whole HVAC system went out, so again, I had to get another loan, and before I knew it, I was $30,000 in debt."
House repairs, eating out, and consumer spending all stacked up.
"There were interest rates, APR's between 16-30%," he said.
He contacted Money Management International, a nonprofit credit counselor.
The nonprofit financial education administers debt management programs to clients.
"So every year, we help about 200,000 people accomplish various financial goals — whether that's improving credit, paying down debt, buying a home, staying in a home, or getting a reverse mortgage," said Thomas Nitzsche, a financial educator with MMI.
They help people consolidate debt but without creating any sort of new loan.
The nonprofit works with their existing creditors to lower their interest rates down to an average of about seven percent so that more of their payments go toward principal rather than interest.
"By getting the interest rates down to an average of seven percent, we can make sure that more that payment is going toward principal and get out of debt within a reasonable time frame," Nitzsche said. "We work with them to create a plan to get it paid off within a reasonable amount of time and work with the creditors to reduce the interest rates and consolidate the payments."
Nitzche says they’ve seen a 37% increase in Missourians seeking debt help and a 36% increase for Kansans.
The nonprofit said people from both states now carry about 15% more debt than last year.
"People will use their credit cards as an extension of their income to sort of bridge that gap," Nitzche said.
He says wages aren’t following inflation and housing costs and commonly sees that people are $300 short a month.
He says the first place to start is ask creditors for a lower interest rate.
Still overwhelmed, that’s when Lundberg contacted the nonprofit credit counselor.
"I’m just here to help inspire, hopefully motivate folks who are in debt who think that they are drowning," Lundberg said. "I know I’m not the only one out there."
He continued, "This month, we became completely debt-free."
He managed to pay off $30,000 in just over a year and a half.
“It’s wonderful, it’s fantastic," he said.
As the total debt load in the U.S. gets higher, so are scams claiming to help pay off that debt.
Nitzche advised people to do their due diligence — if it sounds too good to be true, it probably is.
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