Drowning in Bills? How to Break Free From Record-High Credit Card Debt

And welcome back to The Factor Uncensored. We know now in America, we're seeing a historic high of people facing credit card debt, over $1.2 trillion. In addition to that, people are more and more late with their payments. We talk about it tonight with Lucy Petri, and how to dig yourself out of that financial hole. Joining us here on The Factor Uncensored to talk about all of this debt Americans are in, in the late payments. We are seeing now our financial expert, Lucy Petri, is here. Lucy, how did we get in this position as Americans where we're now using our credit cards to simply buy groceries? There was a time when credit cards were for the big purchases, like appliances, or just for the holidays. But now, it is just to survive on. And I think I may have given the answer, wait, survival. Yeah, that's exactly what it is. Wages have not kept up with inflation, meaning we are not, we're making less money, basically. Because prices have been going up, and our wages, or take home pay, has not adjusted accordingly. So that results in us technically making less money than we used to. And this has been creeping up slowly over the years. And that's why more people are using their credit cards just to survive, because they're not making the amount of money that they used to make, where they could buy groceries for the month, pay the rent and utilities, and live within their paycheck. And also, I can remember a time, and I talk about this with some of my producers, and they're like, Isaiah, you're just old. You're not with the current. But there were people who used to work for department stores, and JCPenney's, and Sears, and Montgomery Wards, and stores like that. And they raised an entire family. They were able to buy a home, go on vacation. What has happened to the dollar, the American dollar? Why does it stretch as far as it used to? Inflation means that the prices go up every year, or monthly, we track monthly inflation, yearly inflation. That means that the prices are increasing, and we don't have the same amount of inflation, the same amount of increases in the pay. Same thing happening with rent and housing. So when you go to the grocery store, you pay more than what you used to pay a year ago for the exact same grocery items. Your rent is higher, but your salary, even if you did receive an increase, your salary is pretty much still the same. So you have less to work with, in essence, that's what happened. And that's why we are seeing high default rates, high interest rates, and the utilization of credit cards like we have never seen before. And the credit card companies, it makes them nervous. They may increase the interest rates if they see that you are using your credit card and not paying it down, because you can't. That might actually cost you more because they're going to increase your interest rate. And some people have credit cards where the interest rate is upwards of 20, 30%. And if you pay just a monthly payment or the minimum payment, you will be in a rat race for the rest of your life. Say you spend $5,000, that's going to take you 10, 15 years to pay off. Many people now are defaulting on those payments and we have a record number of people who are late paying those credit cards that they're surviving off of. And of course, that means it's going to come to a head at some point and what does that look like, Lucy? Well, you can be sued. They can say credit cards can and do sue individuals, take you to court to force payment if you default on payment. And let me just say something else. I just saw a data the other day that only 30% of student loans are getting paid right now, also. So it's not just the credit cards. But yes, the credit card companies can come after you or you may have to file for bankruptcy. Student loans usually do not get discharged in bankruptcy just by the way, but credit cards do. But if you get to that point, it's really devastating because it becomes very, very difficult to obtain credit. You had that scarlet letter on you for seven years. Exactly, exactly. Sometimes longer. Well, we're going to take a break here, Lucy, and when we come back, we're going to take a look at some of the suggestions you have for digging ourselves out of this hole. We'll be back with Lucy Petri in just a moment here on The Factor on Censored. Stay with us. I'm Isaiah Cary, here to shake things up with the stories that hit hard and matter most. Here on The Factor, we cover news with grit and authenticity. We challenge the status quo and get down to real talk and bold discussions. Join us as we amplify the voices that disrupt, inspire, and lead the charge for change. Your story is power, and we're here to unleash it. Be Isaiah, Factor on Censored, weeknights at 1030 on Fox 26 and streaming on Fox Local. Welcome back to The Factor on Censored. We're talking to our financial expert, Lucy Petri, on how so many Americans are now faced with surviving off of their credit cards. And now we're seeing a record number of individuals who are late making those payments. So what happens next? Well, we're talking about lawsuits by those credit card companies and possibly using bankruptcy to get out of it. But with that comes that scarlet letter that will be on your name for the next seven years. So now we're looking for options. We dig ourselves out of this, Lucy. What are some of the suggestions, a common sense approach to help us? Yeah, so the first thing I would do is call the credit card company and try and work out a payment plan with them and stop using that credit card. It can be difficult. It can be, especially if you're using it for living expenses just to get by. You have to stop depleting. You have to stop increasing the expenditure on the credit cards, but the first step is to call the credit card company and tell them you're having trouble making those payments and try and work out a plan with them. You are- Once you've done that and established that and say they give you a plan, but still you're in the hole. So now what do we do? Now you have to make more than the minimum payments. Unfortunately, there's no easy way around it. You have to make more than the minimum payments because like you said, otherwise it will be a decade before you can pay off by just making minimum payments. You have to reduce your monthly expenditures, find a way to live within your means, and I know it's so easy to say that. And for someone who is barely making it and depending on those credit cards, there are some agencies out there that will help you with debt restructuring. Please, please, please be very, very, very careful because not all of them are reputable credit debt consolidation companies. Some of them can be a scam. So please research them extremely careful before signing up with any of them, there are a lot of scams out there. I wish I had better news. I wish I had a good news. We talked about this, you have to roll up your sleeve and maybe get a part time job. Or if you have two or three cars and you don't need all of them, sell one of those cars, have a garage sale. Absolutely, absolutely. You gotta get the hustle on, Lucy, get the hustle on. You do have to get the hustle on. Yeah, get an extra job, especially around the holidays. Cut back on your bills, cut back on those subscriptions. I'm pretty bad about my subscriptions. Cut back on unnecessary expenditures, stop buying unnecessary crap stuff. And start shopping at Audi. Put the little foot, no, I love Audi. I'll just buy two, I don't cheat. I'll go to the clearance section of every damn thing. Because there's a clearance section, it knows me. I know, I know, I know you're pretty good at finding all the deals. So yeah, that's the lifestyle, right? It's hard, it's not easy, and it requires some discipline and planning. All right, Lucy, always good to see you here. I appreciate you with some great advice. Thank you, man. Thank you.