Gauging the personal pain that’s hitting those buried by credit card debt and other bills often amounts to absolute disbelief over 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; yet down slightly from a recent spike at 23.37% in the third quarter of 2024.
But the shocking numbers don’t end there.
Those who lose serious sleep worrying about their bills often face an astonishing cash shortfall each month, owing more money to cover their credit card bills, groceries, car payment, utilities and other expenses than they actually have coming in each month.
How much households owe
Rick Bialobrzeski, chief business development officer for GreenPath Financial Wellness, said the average budget deficit at the time someone seeks financial counseling has grown significantly in the past five years, as prices and interest rates have shot up.
The average monthly budget shortfall skyrocketed to $904 a month in 2025 – up from $439 in 2020. It had been as low as $162 in 2021 – for clients who initially seek counseling at GreenPath, he said.
Let that one settle in: Some households are almost $1,000 in the hole every single month.
“People tend to struggle along and make it work when it’s clear it’s not working,” Bialobrzeski said. “By the time people contact us, it can be a crisis situation.”
Where to find help
GreenPath, which is based in Michigan, does not supply loans but instead offers free debt counseling, which includes helping consumers put a budget together. GreenPath serves the entire United States by phone and internet. (Phone 855-982-0062 or see GreenPath.com for information.)
In Michigan, in-person counseling is available by appointment in a Detroit office. Some other in-person locations are available elsewhere in the United States, too.
In addition, consumers can connect with nonprofit counselors that are part of the National Foundation for Credit Counseling. (See nfcc.org or call 800-388-2227.) You will enter your ZIP code if you call to connect to a nonprofit credit counseling agency in your area.
Those seeking counseling at GreenPath now, Bialobrzeski said, are in worse financial shape than they were in 2020, including dealing with more debt relative to their incomes and far lower credit scores, which means they’re stuck paying even higher interest rates when they borrow.
The average credit score in 2025 at the time someone turned to GreenPath for counseling was 582 – down from 640 in 2020.
A 582 credit score is viewed as “fair” or “subprime,” depending on the scoring model. It makes it tougher to obtain new credit. And if you can qualify, you’re paying far higher interest rates than average.
Typically, Bialobrzeski said, people who sought counseling through GreenPath in 2025 had average credit card rates of 28%.
Burdened by credit cards
Oddly enough, Bialobrzeski said most consumers who contact GreenPath now typically aren’t struggling because of outlandish impulse spending.
Instead, many consumers turned to their credit cards to get by and cover their everyday expenses, as they dealt with affordability challenges in recent years. And it can turn into a brutal cycle.
Many times, he said, people do not have extra savings to pay unexpected expenses in a lot of cases, and they turn to their credit cards, too.
“When we talk with someone it’s not a 15-minute conversation,” Bialobrzeski said. Instead, counselors spend a good 45 minutes or so in a deep dive into all their debts, household expenses, how much money is going out every month, and how much is coming in.
“What we’re finding is because budget deficits are growing, people are leaning on credit cards to get by to help make ends meet every month,” Bialobrzeski said.
“They’re not able to pay off the balance in total. When you don’t pay the balance in full every month, you incur interest charges. And people quickly dig a hole that you can’t get out of,” he said.
GreenPath offers counseling, as well as debt management programs. The average amount of debt on a debt management program at GreenPath is $17,667.
A debt management program, Bialobrzeski said, can lower interest rates on credit cards, waive late fees, waive overlimit fees, and bring delinquent accounts current to stop collection activity.
After working with credit card issuers, he said GreenPath is able to negotiate reduced credit card rates and payments.
“It may be as low as zero,” he said. “It could be higher in some cases, 9.9% or whatever.”
The payments for credit card debt on average drop to $390 a month on a debt management program from an average of $589 a month. It can take 50 months on average to pay down that debt through a debt management program.
The objective is to avoid filing bankruptcy, if possible, and typically pay off credit cards and other unsecured debt within five years or less.
The program has a one-time setup fee of $50. The ongoing monthly fee averages $37, but could be as high as $75 depending on the debt amount and state of residence.
In 2025, GreenPath worked with more than 65,000 people to repay nearly $300 million in debt at lower interest rates.
As of January, about 52,000 people were actively paying down debt on a GreenPath debt management plan.
A debt management plan is not the same as debt settlement companies that often encourage you to stop paying your bills as a way to get creditors to negotiate, a step that experts warn will harm your credit score and likely drive up late fees and other charges. Consumer watchdogs warn that you want to avoid anyone who charges big upfront fees, guarantees that you can settle your debt for pennies on the dollar, or touts a “new government program” to bail out personal credit card debt.
Holding out hope isn’t enough
People who are facing challenges shouldn’t wait to take action. Or hold on to hope that somehow they’ll suddenly see a 10% cap on credit card rates, either.
The National Foundation for Credit Counseling has warned that buzz about a proposed 10% cap has “created a new level of confusion” for many consumers. The concern is that some will incorrectly assume that a 10% cap is a done deal and further delay getting help to address their debt.
In January, President Donald Trump called for a one-year, 10% cap on credit card rates, which has received plenty of pushback from bankers. Trump cannot legally issue an executive order to create a nationwide interest rate cap; such action requires legislation to be passed by Congress.
In a speech at the Detroit Economic Club on Jan. 13, Trump said his proposed mandatory 10% cap on credit card rates for one year would be part of a group of strategies to lower consumer costs.
“The rates are way too high,” Trump said at the Detroit Economic Club.
Some heavy hitters are pushing back on the 10% cap, though. The American Bankers Association, the Consumer Bankers Association, the Independent Community Bankers of America and others argue that a “10% interest rate cap would reduce credit availability.”
Opponents maintain that it would be impossible for credit card issuers to price for risk and cover the costs involved with the credit card business as it stands now if a 10% cap were in place.
Consumers might expect reduced credit lines, fewer offers of low introductory rates and more changes under a mandatory cap, 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 – would likely lose access to credit cards if a 10% cap went into place.
Nationwide, the industry group estimates that more than 136 million consumers – or at least 73.6% of open accounts – would lose access to credit cards if bankers had to follow a 10% cap on credit card interest rates. The American Bankers Association has a website with the state-by-state breakdown at ratecapreality.com where consumers can see the potential impact in their respective state.
Theoretically, Bialobrzeski said, a credit card issuer could decide to close some accounts that are already open if a 10% cap is put into place. The outstanding balance on that credit card, according to some accounts, could likely be transitioned into an installment loan that had to be paid off. Bankers, of course, don’t want to lose good customers so the vulnerable might be the hardest hit.
People who desperately need slack in their budget, he said, might not be able to turn to credit cards to handle some emergency expenses. Instead, they might turn to higher rate payday loans or other predatory products.
One of the bigger worries about the proposed 10% cap, he said, is that the credit card industry would need to markedly change, including taking steps that would reduce access for many consumers.
“A lot of people who rely on credit cards today would not have that option in the future,” Bialobrzeski said.
The most vulnerable consumers would include those who have unsteady hours at work, paychecks that vary significantly week to week, and often only are able to make the minimum monthly payments.
Currently, people still have options to try to deal with their debt – especially as a 10% mandatory cap on credit card interest rate would need to be approved by Congress.
“What people need to realize is that they can contact their credit card companies,” Bialobrzeski said. “If they’re struggling to pay their cards, usually 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 whether they’d be willing to reduce your rate.
Credit card issuers, Bialobrzeski said, may offer a lower interest rate for a limited period of time, like three months to nine months, typically at rates around 2% to 12% to give a person some time to pay down their debt.
Contact personal finance columnist Susan Tompor: [email protected]. Follow her on X @tompor.
This article originally appeared on Detroit Free Press: Households coming up 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