Families Going Closer to $1,000 a Month Short: How to Get Help

Quantifying the personal pain experienced by those burdened by credit card debt and other debts is often like utter disbelief at today’s incredibly high interest rates.

The average rate on credit card debt was 22.3% for accounts that carried a balance and ended up being assessed interest, according to the latest November data released by the Federal Reserve. That’s up from 16.28% in 2020; but down slightly from a recent spike of 23.37% in the third quarter of 2024.

But the shocking numbers don’t stop there.

Those who lose a lot of sleep worrying about their debt often experience dramatic cash flow deficits each month, owing more money on their credit card bills, groceries, car payments, utilities and other expenses than they take in each month.

How much money families owe

Rick Bialobrzeski, chief business development officer at GreenPath Financial Wellness, said the average budget deficit when seeking financial advice has grown significantly over the past five years, as rates and interest rates have risen.

The average monthly budget deficit increased to $904 per month in 2025 – up from $439 in 2020. We were as low as $162 in 2021 — for clients who first sought advice from GreenPath, he said.

Let that settle: Some households are nearly $1,000 in the hole every month.

“People tend to struggle and make it work when it’s clear it’s not working,” Bialobrzeski said. “When people contact us, it can be a critical situation.”

Where to get help

GreenPath, based in Michigan, does not offer loans but instead offers free credit counseling, including helping consumers put together a budget. GreenPath serves the entire United States by phone and online. (Phone 855-982-0062 or see GreenPath.com for information.)

In Michigan, in-person counseling is available by appointment at the Detroit office. Other personal locations are available elsewhere in the United States, as well.

In addition, consumers can connect with nonprofit counselors who are part of the National Foundation for Credit Counseling. (See nfcc.org or call 800-388-2227.) You’ll enter your ZIP code when you call to be connected to a nonprofit credit counseling agency in your area.

Those seeking GreenPath counseling now, Bialobrzeski said, are in worse financial shape than they were in 2020, including dealing with more debt related to their income and lower credit scores, meaning they are stuck paying even higher interest rates when they borrow.

The average credit score in 2025 when someone turned to GreenPath for counseling was 582 – down from 640 in 2020.

A credit score of 582 is considered “fair” or “subprime,” depending on the scoring model. It makes it difficult to get new credit. And if you do qualify, you pay much higher interest rates than average.

In general, Bialobrzeski said, people seeking GreenPath counseling in 2025 had an average of 28% credit cards.

Overwhelmed by credit cards

Ironically, Bialobrzeski said that most of the consumers who contact GreenPath are now struggling because of the mysterious spending.

Instead, many consumers are turning to their credit cards to get and meet their daily expenses, as they have faced affordability challenges in recent years. And it can become a vicious cycle.

Many times, he said, people don’t have extra cash to cover unexpected expenses in many situations, and they turn to their credit cards, too.

“When we talk to someone, it’s not a 15-minute conversation,” said Bialobrzeski. Instead, advisors spend 45 minutes or more doing a deep dive into all of their debts, household expenses, monthly outgoings, and income.

“What we are finding is because the lack of budget is increasing, people rely on credit cards to be able to make ends meet every month,” said Bialobrzeski.

“They can’t pay the whole balance. If you don’t pay the balance every month, you get interest. And people quickly get into a hole that you can’t get out of,” he said.

GreenPath offers counseling, and debt management programs. The average amount of debt in the debt management program at GreenPath is $17,667.

A debt control program, Bialobrzeski said, can lower interest rates on credit cards, stop late fees, stop late payments, and bring delinquent accounts to a halt in collection.

After working with credit card issuers, he said GreenPath is able to negotiate reduced credit card rates and fees.

“It could be as low as zero,” he said. “It could be higher in some cases, 9.9% or whatever.”

Credit card debt payments on average drop to $390 per month on a debt management plan from an average of $589 per month. It can take an average of 50 months to pay off that debt with a debt management plan.

The goal is to avoid filing for bankruptcy, if possible, and generally pay off credit cards and other unsecured debts within five years or less.

The program has a one-time setup fee of $50. The monthly recurring fee is up to $37, but can be as high as $75 depending on the amount of credit and residency status.

By 2025, GreenPath worked with more than 65,000 people to refinance nearly $300 million in loans at low interest rates.

As of January, nearly 52,000 people were paying off debt through GreenPath’s debt management program.

A debt management plan is not the same as debt settlement companies that often encourage you to stop paying your debts as a way to get creditors to negotiate, a move experts warn will hurt your credit score and possibly increase late fees and other costs. Consumer watchdogs warn that you want to avoid anyone who charges big upfront fees, makes sure you can pay off your debt with pennies on the dollar, or taps into a “new government program” to recover your credit card debt.

Holding on to hope is not enough

People facing challenges should not wait to take action. Or hold on to the hope that somehow they’ll suddenly see a 10% cap on credit card rates, either.

The National Foundation for Credit Counseling warned that talk of the proposed 10% “has created a new level of confusion” for many consumers. The worry is that some will mistakenly think the 10% cap is a done deal and delay getting help to deal with their debt.

In January, President Donald Trump called for a one-year, 10% reduction in credit card fees, which has drawn much fanfare from bankers. Trump cannot legally issue an executive order to create a national interest rate cap; such action requires legislation to be passed by Congress.

In his speech at the Detroit Economic Club on Jan. 13, Trump said his proposal for a mandatory 10% rate on credit card rates for one year would be part of a group of strategies to lower consumer costs.

“Prices are too high,” Trump said at the Detroit Economic Club.

Some heavy hitters drop back to 10%, though. The American Bankers Association, the Consumer Bankers Association, the Independent Community Bankers of America and others argue that “an interest rate of 10% would reduce the availability of credit.”

Opponents maintain that it would be impossible for credit card issuers to price out the risk and cover the costs involved in the credit card business as it is now if the 10% cap were in place.

Consumers can expect reduced credit lines, fewer offers for lower introductory rates and more changes below the mandatory rate, according to the banking industry.

According to estimates by the American Bankers Association, more than 4 million consumers in Michigan alone – or at least 72.9% of open accounts – may lose access to credit cards if 10% expire.

Nationally, the industry group estimates that more than 136 million consumers – or at least 73.6% of open accounts – will lose access to credit cards if bankers have to follow the 10% credit card interest rate. The American Bankers Association has a website with a state-by-state breakdown at ratecapreality.com where consumers can see the potential impact on their circumstances.

In theory, Bialobrzeski said, a credit card issuer could decide to close other open accounts if the 10% cap is imposed. The remaining balance on that credit card, according to some accounts, may be transferred to the installment loan that was due. Bankers, of course, don’t want to lose good customers so the vulnerable will be the hardest hit.

People who need more flexibility in their budgets, he said, may not be able to turn to credit cards to cover other emergency expenses. Instead, they may turn to high-end payday loans or other predatory products.

One of the biggest concerns about the proposed 10%, he said, is that the credit card industry would need to change dramatically, including taking steps that would limit access to many consumers.

“Many people who rely on credit cards today will not have that option in the future,” Bialobrzeski said.

High-risk consumers can include those who have unstable work hours, paychecks that vary widely from week to week, and are often unable to make minimum monthly payments.

Right now, people still have options to try to deal with their debt – especially since the 10% credit card interest rate would need to be approved by Congress.

“What people need to understand is that they can contact their credit card companies,” Bialobrzeski said. “If they’re having trouble paying off their cards, usually the credit card companies are willing to work with them.”

So, the first step any consumer should take, he said, is to ask your credit card issuer directly if they would like to lower your rate.

Credit card issuers, Bialobrzeski said, can offer low interest for a limited time, such as three months to nine months, usually at rates of around 2% to 12% to give a person some time to pay off their debt.

Contact financial columnist Susan Tompor: [email protected]. Follow him on X @tompor.

This article first appeared in the Detroit Free Press: Households running out nearly $1,000 short each month. How to get help

Reporting by Susan Tompor, Detroit Free Press / Detroit Free Press

USA TODAY Network via Reuters Connect