WHEN THE PANDEMIC HIT AND the restaurant that Eric S. managed in Brighton, Mich., closed its doors temporarily, Eric filed for unemployment insurance benefits. When the business reopened a couple of months later and Eric returned to work, his hours were cut in half.
Although Eric and his wife managed to keep up with their mortgage payments, the couple found themselves strapped for cash and began to fall behind on their credit card bills. By September, they had accrued about $13,000 in credit card debt, and Eric’s credit score had dropped nearly 75 points, to the low 600s. “I felt like I was losing control,” he says. “It also put a lot of stress on our marriage.”
The couple sought out a credit counselor, who helped them retool their budget—getting rid of their Hulu and Netflix subscriptions alone saved them $70 a month—and begin paying down their debt. Just two months later they had shaved $3,000 off their total balance. “We’ve learned how to manage our money a lot better from this whole experience,” Eric says.
THE DEBT DIVIDE
The coronavirus crisis has been a double-edged sword for Americans in terms of debt. First, the good news: After receiving an infusion of cash from stimulus checks last spring, millions of consumers used their relief funds to pay down debt. On April 15, 2020, as the first major wave of checks hit Americans’ bank accounts, there was a near-instantaneous increase in debt payments, according to a TrueAccord study of data from 12 million U.S. consumers.
Denne historien er fra January 2021-utgaven av Kiplinger's Personal Finance.
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Denne historien er fra January 2021-utgaven av Kiplinger's Personal Finance.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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