KSHB 41 reporter Abby Dodge covers consumer issues, personal budgeting and everyday spending. Share your story idea with Abby.
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Americans are paying off debt at a rate comparable to 2011. Delinquencies over the last 90 days are up to 11%.
A recent NerdWallet survey found almost 50% of Americans with revolving credit card debt are charging daily essentials.
“Unfortunately, we are seeing an increase in our client intakes looking for help with debt and being behind on credit card payments, mortgages and auto payments,” said Ron Farmer, co-founder of Credit and Homeownership Empowerment Services, better known as CHES, Inc
Farmer's nonprofit helps Kansas Citians prevent foreclosure and work to restore their credit.
The cost of necessities like food, housing and transportation are all on the rise, but household incomes aren’t keeping up the pace. A recent NerdWallet study reported food (27%), housing (26%) and transportation (28%) have outpaced income growth (21%).
“Really, we spend quite a lot of time with each individual client to make sure they are set up for success,” said Emily Martens, CHES, Inc. credit specialist. “It’s very comprehensive.”
Many Americans are struggling to make a minimum credit card payment.
The Kansas City Federal Reserve estimates just shy of 11% of people are paying the monthly minimum while sites like NerdWallet put the number closer to 22%.
Farmer said the current financial landscape is partially a result of delayed impacts from the 2020 pandemic.
“They’ve gone through their savings, they are now utilizing credit cards because they don’t have savings or income to meet those monthly expenses,” he said.
Farmer recommends families create a spending plan.
If debt collection agencies come calling, he said you don’t have to answer the phone right away but must call them back, tell them what you can afford to pay and create a plan.
