The Economic Reality of Michigan Life
The state of Michigan has long been known for its contributions to American manufacturing and the pristine natural beauty of its natural environment in the Great Lakes, MI, region.
From the birth of the automobile in the early 1920s, the rise of Motown Records in the 1960s, and the championship-winning Tigers, Wolverines, Pistons, and Red Wings teams of the 80s, 90s, and 2000s, Michigan has always had its finger on the pulse of American daily life and culture.
Unfortunately, a rich, vibrant history is not enough to pay the bills in 2023.
To add insult to injury, the blue-collar automotive and manufacturing sectors that built Michigan State into what it is today have been replaced by newer industries. Detroit’s labor participation rate of 67% ranks last out of the top 100 most populous cities in the nation. With statewide unemployment higher than the national average, smaller cities are not faring much better.
Michigan State Credit Card Debt
Though in Michigan MI, credit card debt and consumer debt are below the national average, this is misleading — many jobless Michigan residents have low credit scores and are struggling to secure loans in the first place, while many more are simply declaring bankruptcy to clear their debt.
An average credit card debt of $5,399 might not seem high in a state with high wages. In Michigan, however, it can be crippling, especially when a person also has a home loan or student loan to pay off. Failure to pay off credit on time can be disastrous for a family’s financial outlook.
Why do people end up with credit card debts?
It is very easy to fall into credit card debt, particularly in volatile markets and at a time of rising inflation. Michigan consumers can find it hard to keep up with their living expenses. Many then turn to their credit cards to cover the gap.
Using your credit card too often is not free — it comes with a cost. While shopping online or spending money on you and your family is highly enjoyable and fun, it can lead to credit card debt. If your income cannot cover your expenses, your credit card balance will rise, reaching the credit card limit set by your bank and making it even more difficult to meet the monthly payment.
Many retail companies offer enticing terms and rewards for using their store credit card but you still have to pay the balance at the end of the month.
Many Michigan residents do not use their credit cards for frivolous shopping but to cover everyday expenses such as groceries, gas, and home bills. For them, a high debt amount and a high monthly payment make the situation even more precarious.
Lack of an emergency fund
Unexpected expenses, such as a home or car repair, can break the bank. A pay cut, job loss, or temporary disability can also lead to an income loss, which would be easier to survive with a financial safety net.
In Michigan, low income and high costs can undermine efforts to stay on a budget and save enough for an emergency fund. Using your credit cards for emergency payments may seem the only affordable solution. However, credit card balances have to get paid eventually. If you max out your credit card with a large unforeseen expense, you have to work your finances around to repay the debt.
It is easy to imagine how people in the state of Michigan get into credit card debt with medical expenses spiraling. Without an emergency health fund, a high health insurance deductible or a health event that is not covered by an insurance policy can easily be the cause of credit card debt.
Again, the credit card balance must get paid or it will increase when the bank charges interest on the outstanding balance. If only minimum payments are made, the credit card debt will only marginally decrease and may take years to pay it off.
Low income stops you from putting money aside for an emergency fund which is one of the many reasons why people accumulate credit card debt. Many Michigan employees live paycheck to paycheck and even then can barely cover their living expenses. With no money in your savings account, using a credit card sometimes becomes unavoidable.
When at the end of the month people run out of money, they turn to their credit cards to pay for their everyday needs. This can compound over several months and can become a leading cause of credit card debt.
Making only the minimum monthly payment
When interest is factored in, the minimum monthly payment only lowers the outstanding credit card balance by a small amount each month. Continuing to make purchases while only paying the minimum worsens the problem and creates the perfect storm for credit card debt.
Banks make their money by charging interest. The minimum monthly payment is calculated on the outstanding balance at the end of the month. A high credit card balance comes with a high minimum payment, where most of the payment is just interest.
When people cannot pay even the minimum monthly amount due, they soon face debt collectors — and collection practices are not always fair, especially for unsecured debts such as credit cards.
Escaping from Debt in the State of Michigan
The first step towards sustainable debt relief is getting off the ‘minimum monthly payment’ hamster wheel.
The second step is finding a solution that actually works for you. Americor is your trusted partner in Michigan to help you reduce your debt. Contact us today to get more information about our services and how we can offer you credit counseling and help you with debt relief.
Credit counseling and debt relief in Michigan
The first step towards debt relief is to seek credit counseling through Americor.
Americor is an experienced credit counseling agency that can help you with credit relief. Our certified debt specialists will review and analyze your financial situation and present you with the facts. They will develop a credible, feasible, and achievable plan for escaping your debt trap.
Credit counselors are trained professionals. They can explain what budgeting means and how you can allocate your income to your expenses. They can also help with your money management and devise debt repayment strategies and debt management programs that work for your income level and living expenses.
Credit counseling can help you get a clear picture of where your debt stands and how you can address it. The goal is to set you free from your credit card debt and boost your financial stability. Contact us today and get your free debt analysis!
Debt consolidation loans
Debt consolidation loans combine all your previous loans into a low-interest one. If you have several credit cards with outstanding balances, debt consolidation could merge them into one new loan with a lower interest rate that will help you with debt relief.
Credit cards charge high interest rates that increase your debt exponentially. A debt consolidation loan has to get paid but you get an extended period to repay the debt at a far more manageable interest rate.
Such a loan helps you manage your finances much better and could be a way to a debt-free life. Please note that there are terms and conditions linked to such loans, so you should discuss this option with a professional.
Debt settlement programs
Debt settlement is another option for Michigan debt relief.
Americor can help you negotiate with your creditors to lower the amount of debt you owe to your Michigan banks or other financial institutions. Debt settlement can waive late fees and lower your overall debt level. Debt settlement can also involve a more manageable repayment schedule or a lump sum payment that is lower than the overall debt. It may, however, have an impact on your credit score.
Debt management can help you find debt relief with the right budget and planning. The aim is to manage your debts and help you pay them off at a slower pace, with a lower interest rate, and through debt restructuring.
For example, if you have multiple credit cards, debt management can shift the balance of one credit card to another, if the latter has a lower interest rate.
Americor debt advisors will devise a debt management plan (DMP) that works for your circumstances and matches your income, spending, and debt level. The ultimate goal is to make you debt-free with the least impact on your finances and credit score. Call us today to find out what your debt management options are.
If you feel that your debts have spiraled out of control and no debt counseling, debt management, or debt settlement are viable solutions, then perhaps declaring bankruptcy could be your best debt relief option.
Bankruptcy is often a long process with long term negative consequences that involves your creditors and the courts deciding on the level of debt that will be discharged or reduced. When you declare bankruptcy, it will stay on your financial record and you could find it hard to negotiate a car loan, mortgage, or personal loan for up to 10 years.
Americor for Michigan Debt Relief
If you feel that your credit card debt is drowning you, you should contact Americor. Americor is a debt counseling company you can trust to help you in the Michigan area. You can ask us any questions regarding debt relief strategies.
In fact, it’s important to seek professional advice and consider all debt relief strategies available before making any financial decision. There might be debt relief options you might not have heard of that could make debt relief more manageable. Call now for a free consultation with one of our certified debt specialists!
Each financial situation is unique. That is why our debt specialists analyze your case and create a credit report and a debt relief plan that works for you.
If you are seeking financial freedom from debt, Americor is your trusted partner. We will offer you advice on the best debt relief solutions and discuss potential tax consequences of less than full balance debt resolution.
We will also provide information on matters such as monthly payments, fees and interest charges, credit repair services, debt adjusters, Michigan debt settlement, student loans, payday loans, the Michigan statute of limitations on debt collection, wage garnishment, and law firm debt collectors.
Finally, we will let you know whether you need legal advice from an experienced attorney and inform you about the Michigan Fair Debt Collection Practices Act.
Our Clients Say...
“In 2020, I was drowning in debt. I enrolled in Americor for my 10 creditors for $110,000… and today (three years later) I have cleared my entire balance. It was not an easy process, but Americor guided me through and I am debt free!”
“I was down $80k in business debt, and I remember hearing Americor radio advertising. My credit score was down to 570 from 810. I’ve been in the program for over 3 years. It works, just be patient. And my credit score is currently back up to 710!”