Local Man Sees Relief as National Debt Help Hits 15-Year High

Jonathan Levine, an Indianapolis resident, recently secured help to lower his credit card interest rates through Money Management International. His relief follows a national report showing that demand for debt assistance has climbed to levels not seen in 15 years.

Levine works a commission-based job and saw his income drop in 2023. He spent his emergency savings to cover basic living costs and then turned to credit cards for the rest. The financial strain affected his work performance, his marriage, and his relationship with his daughter, he said.

Levine is part of a growing group of Americans struggling with unsecured debt. Money Management International, a national nonprofit, stated that it is serving more clients than at any point since 2011. Ted Rossman, the organization's principal consumer finance analyst, attributed the spike to the cumulative effects of high inflation and high interest rates.

The average unsecured debt among MMI clients stands at $40,200, a 5 percent increase from last year. This figure covers credit cards and personal loans that are not backed by physical assets like homes or cars. Rossman noted that secured debts, such as mortgages or auto loans, are handled differently because lenders can repossess the asset if payments stop.

MMI data shows a disconnect between income growth and debt accumulation. The average client earned about $44,000 in 2019 and now earns approximately $66,000. While income rose by nearly 50 percent, the average debt load increased by 55 percent. Rossman described this dynamic as a treadmill on which people are running.

Other statistics from the report include a 25 percent delinquency rate among clients, meaning one in four has at least one late account. Gen Z is the fastest-growing client demographic, up 31 percent year-over-year. In June, MMI surpassed $1 billion in managed client debt, the highest demand since 2013. Additionally, 46 percent of consumers reported taking out personal loans to consolidate debt before their credit card balances rose again.

Rossman said the organization works with credit card companies to drastically lower interest rates for clients. He encouraged consumers not to feel ashamed of their financial situation. Levine said he is pleased with the outcome of his participation in the program. He noted that honesty about one's financial state is required, including cutting back on dining out and vacations.