Latest news with #FreedomDebtRelief
Miami Herald
07-07-2025
- Business
- Miami Herald
What collection debt looks like in America: A mid-year look
What collection debt looks like in America: A mid-year look In April 2025, Freedom Debt Relief reviewed data from tens of thousands of people actively looking for help with their debt. The numbers might be surprising. About one in four has at least one account in average collection balance is over $3, debt relief seekers have multiple overdue still use their credit cards, despite struggling with high balances and maxed-out cards. This report examines debt collection in the U.S. It shows which states have the most debt and what this means for American families' finances. Key takeaways: One in four Americans seeking help with debt has at least one account in debt average debt collection balance is $3,027 across two seeking debt relief are typically close to maxing out their credit cards. What Is a Collection Account? A collection account is a debt your original creditor has sold to a debt collection agency. Creditors, like banks or credit card companies, usually send your account to collections if payments are late for 120 or 180 days. It's sometimes a good idea to pay off a collection account in full. If that's not possible, you have other options. For example, you could negotiate with debt collectors yourself, or join hands with a debt settlement company that bargains with a debt collector for you. Collection Debt by the Numbers: The National Picture In April 2025, about one in four people looking for debt relief had at least one account in collections. The average collection balance is $3,027, spread across nearly one to two collection accounts. Signs point to financial issues being tied to credit card debt. For those in need of debt relief, there is an average of 14 open tradelines, including more than five credit cards and $8,500 in credit card debt. Furthermore, if someone's financial picture matches that of the average American with debt in collections, the average credit utilization rate is 89%. Having credit cards that are maxed out (or close to it) is a red flag and means the user is leaning too heavily on credit, probably since before their accounts went to collections. The Five States With the Highest Collection Balances Check out how each state stacks up to the average collections debt figure. The table below highlights the five states with the highest average balances among people seeking debt relief in April 2025. Collection accounts by state Biggest debts The Golden State takes the cake for the most expensive debts. California tops the list, with an average collection balance of $4,513. However, only 16% of people in the state have an account in collections. More debt relief seekers in collections In contrast, Nevada and Kansas have significantly higher proportions of people with debt in collections-27% in both states-and sizable average balances over $3,900. Highest number of collection accounts More than one debt in default: Montana and Kansas showed the highest average number of collection accounts per person, with 2.4 and 2.3, respectively. These patterns point to different types of risk across states. In some places, fewer people have accounts in collections, but the ones who do owe more. In other cases, collections are more widespread, with people juggling multiple delinquent accounts. Credit Card Debt and Utilization Credit card debt and collection accounts are closely linked, like two peas in a pod. Most of the debt relief seekers in this analysis have high credit card balances, often maxed out. This is because credit cards are typically the first resource when people don't have enough in the bank to pay bills. Over time, carried balances build interest. Sometimes, people fall behind, and their credit card debt can be sold to collection agencies. Of those surveyed, the table below highlights the average credit card balance by state. Credit card balances are high among those looking for debt relief. Across the board, they range from just over $8,000 to nearly $10,000. Owning multiple cards is the norm. The average person in each state has around five open credit cards, and utilization is extremely high-between 88% and 92%. These numbers show that before someone defaults on debt, they probably rely a lot on credit for daily expenses or emergencies. For many, collections may have been the result of an already maxed-out financial situation. Spotlight: What Collection Debt Looks Like in California Debt in collections - California highlights - April 2025 Spotlight: What Collection Debt Looks Like in Kansas Debt in collections - Kansas highlights - April 2025 Spotlight: What Collection Debt Looks Like in Montana Debt in collections - Montana highlights - April 2025 Spotlight: What Collection Debt Looks Like in Idaho Debt in collections - Idaho highlights - April 2025 Spotlight: What Collection Debt Looks Like in Nevada Debt in collections - Nevada highlights - April 2025 Collection and credit card debt by age group Let's dig deeper into collection accounts to sort debts by age. Despite some overlap, older and younger Americans have very different situations. Balance sizes peak in middle age. People ages 36–50 have the highest collection balances, owing more than double the average of most other groups. At this age, people are likely to reach the point where they spend big bucks on housing and kids. Meanwhile, older adults (51–65 and 65+) have the highest credit card balances, but lower collection balances. That could reflect more available credit and a better payment history. Younger people (18–25) show very high utilization (96%) even though their balances are relatively low-suggesting they're maxing out low credit limits. It's easier to max out cards when you're capped at $1,000, a relatively low credit line. Monthly payment amounts rise with age and peak in the 51–65 group-consistent with higher income or credit limits. At this age, some might also have a strong resolve to start paying down those balances.. Tips to Deal With Debt in Collections When dealing with debt in collections: Check your credit reports. Verify information reported by credit collectors is valid and true, and report your rights. The Fair Debt Collection Practices Act (FDCPA) protects you from debt collectors who would lie to or harass debt resolution. Debt resolution could be ideal when you can't afford to pay a debt in full. This story was produced by Freedom Debt Relief and reviewed and distributed by Stacker. © Stacker Media, LLC.
Yahoo
04-07-2025
- Business
- Yahoo
3 Worst Money Habits of Millennials — And What To Do Instead
Let's be real — money can feel like a never-ending puzzle, especially for millennials juggling student loans, rent and that constant urge to treat themselves. Some money habits sneak up on us without us even realizing it, and before you know it, you're stuck in a cycle that's tough to break. But don't worry, you're not alone. And the good news is, there are smarter, easier ways to take control of your cash. Learn More: Find Out: 'Millennials face unique money struggles, but some of their worst financial habits are based on well-meaning but misplaced moves,' said Kevin Huffman, owner of Kriminil Trading. Here are some of the worst money habits millennials tend to fall into, and more importantly, what you can do instead to build a healthier financial future. According to Huffman, one of the big traps for millennials is the masquerade of lifestyle inflation as 'self-care.' While it might feel self-affirming to spend $200 on a yoga retreat or daily $7 matcha lattes, but when you haven't budgeted for it, it can be chipping away at your savings quietly. Instead, Huffman recommended budgeting for self-care that's actually going to reduce future stress such as a 401(k) match, or a much-needed emergency fund. For You: Jason Pack, chief revenue officer at Freedom Debt Relief, said millennials have really normalized paying a premium for convenience compared to generations before them, often with the easy swipe of a credit card or Buy Now, Pay Later (BNPL) service. 'Some people have a constant stream of Uber Eats and impulse buys from Amazon with same-day shipping, using services like Afterpay to finance every purchase,' Pack remarked. He explained that these services cost more, which isn't always bad. Sometimes, convenience is worth the premium, so long as your other financial priorities are taken care of. 'But too many people have convenience spending so engrained in their daily habits, they're unaware of the full impact on their finances,' Pack said. When you sit down and add up all those purchases over a month, he said most people are shocked at the numbers. Before worrying about building a restrictive budget, go through your last 60 days of credit card and bank statements. Tally up the delivery fees, the tips, the service charges, and the BNPL payments. From there, create a conscious spending plan. Automate your savings, your retirement contributions and your bill payments first. Then, decide on a specific, reasonable amount for a monthly convenience fund. 'That's your guilt-free money to spend however you like, because you know all your important financial goals have already been taken care of.' 'Millennials carry a heavy psychological weight from their student loans and are determined to pay them off as fast as possible,' said Pack. According to CNBC, millennials are the generation with the fastest growing debt load. While it's responsible to pay down debt, you should do the math before you throw every spare dollar there. If you have a government student loan with a 4% interest rate, Pack said it might make sense to make minimum payments as you build a proper emergency fund or invest for your future. The trick is to prioritize all your financial priorities and fund them in a balanced way rather than taking an all-or-nothing approach. More From GOBankingRates Mark Cuban Warns of 'Red Rural Recession' -- 4 States That Could Get Hit Hard 4 Housing Markets That Have Plummeted in Value Over the Past 5 Years How Much Money Is Needed To Be Considered Middle Class in Your State? This article originally appeared on 3 Worst Money Habits of Millennials — And What To Do Instead
Entrepreneur
02-07-2025
- Business
- Entrepreneur
Freedom Debt Relief Review: What to Know About Consolidating Your Debt
As consumer debt climbs across the U.S., many people are desperately searching for ways to regain control. Finding a manageable path forward is essential, whether it involves managing credit card bills, medical debt, or personal loans. Opinions expressed by Entrepreneur contributors are their own. You're reading Entrepreneur India, an international franchise of Entrepreneur Media. As consumer debt climbs across the U.S., many people are desperately searching for ways to regain control. Finding a manageable path forward is essential, whether it involves managing credit card bills, medical debt, or personal loans. Freedom Debt Relief (FDR) offers an alternative to traditional debt consolidation loans for those overwhelmed by unsecured debt. What Is Freedom Debt Relief? Founded in 2002, Freedom Debt Relief has helped over 850,000 clients resolve over $15 billion in debt. The company offers debt settlement, not consolidation loans. Instead of bundling your debts into a new loan, FDR works with your creditors to reduce what you owe through negotiation. The approach targets consumers who can't qualify for a loan or want to reduce their total debt, not just their interest rates. Can Freedom Debt Relief Help With Debt Consolidation? While FDR doesn't offer loans, its settlement program can serve a similar purpose. Clients make a single monthly deposit into a dedicated account, which is then used to pay negotiated settlements. Over time, this can simplify repayment and reduce overall debt. The program benefits those who don't qualify for loan-based consolidation due to poor credit or high debt loads. How the Freedom Debt Relief Program Works FDR's process begins with a free consultation. If you enroll, you'll start making deposits into a dedicated account. As your balance grows, FDR negotiates with your creditors to settle accounts for less than the full amount. Once the settlement is reached, the agreed amount is paid from your account. This process repeats until all enrolled debts are resolved. The program typically takes 24 to 48 months to complete. Benefits of Using Freedom Debt Relief Clients receive reduced total debt through negotiated settlements. There is one monthly deposit instead of multiple payments. There are no upfront fees—you only pay after a successful settlement. FDR is a trusted provider with two decades of experience. Downsides to Consider There is a short-term credit impact from settling rather than paying in full. Fees range from 15% to 25% of enrolled debt upon settlement. It is not a loan: FDR isn't a fit for those seeking traditional consolidation loans. The program only applies to unsecured debts—secured loans, such as mortgages and auto loans, do not qualify. Freedom Debt Relief vs. Traditional Debt Consolidation Debt consolidation typically involves taking out a new loan to combine multiple balances. This can help lower your interest rate, but it often requires good credit. FDR, by contrast, allows consumers to reduce what they owe through negotiation, not new borrowing. For example, a borrower with $25,000 in credit card debt who has missed payments may not qualify for a low-interest loan but may find relief through FDR's program. Customer Experiences FDR holds strong ratings on Trustpilot and the Better Business Bureau. Many users highlight the company's clear communication and personalized service. Common praise includes: "I saved thousands and finally got some peace of mind." "They were kind, non-judgmental, and handled everything for me." "It took time, but it worked. I'm debt-free in under two years." Some reviews note the process isn't instant, but the result is often worth the wait. Is Freedom Debt Relief Right for You? Freedom Debt Relief is a strong option for individuals with significant unsecured debt who do not qualify for consolidation loans. It's ideal for individuals seeking to reduce their debt and simplify their repayment process. The program benefits individuals facing hardship, such as job loss, medical bills, or other life events that have made debt unmanageable. While it isn't a one-size-fits-all solution, it can offer relief to people committed to sticking with the plan. If that sounds like you, starting with a free consultation could be the first step toward financial freedom. Investing and Crypto Investing involves risk, and your investment may lose value. Past performance gives no indication of future results. These statements do not constitute and cannot replace investment or financial advice.
Miami Herald
25-06-2025
- Business
- Miami Herald
Credit card limits aren't keeping up, and it's hurting people in these states
Credit card limits aren't keeping up, and it's hurting people in these states Credit card debt isn't just about how much you owe. What matters is how close you are to your credit limits-and how hard it is to pay that debt off with the income you have. Freedom Debt Relief looked at real data from people actively seeking debt relief and created a Credit Pressure Index to get a better idea of their financial stress. The index combines how much credit people are using, how much of their income goes toward debt, and how much credit they actually have. The typical numbers vary quite a bit depending on where you live. In some states, people have a fairly reasonable amount of debt compared to their credit limits and income. But we also found a few states where residents are under serious credit card pressure. Key takeaways: Credit card debt is harder to manage when it takes up a large portion of your available credit or disposable states with the highest levels of credit card pressure are Kentucky, Alabama, and you have lots of credit card debt, start developing a realistic payment plan or contact a debt relief company for help. What creates credit card pressure? Your credit utilization, debt burden, and credit limit all play a part in how much credit card pressure you feel. These are the factors used to calculate the Credit Pressure Index. Here's how each of them works. Credit utilization Credit utilization is the percentage of your available credit currently in use. For example, say you have one credit card with a $9,000 balance and a $10,000 credit limit. Your credit utilization is 90%. When you have high credit utilization, you don't have much spending power left on your credit cards. In the example above, you'd be left with $1,000 you could spend before hitting your credit limit. Utilization is one of the most important credit score factors, and high utilization can hurt your score. People with high utilization are statistically more likely to miss a payment or default on their debt. The credit bureaus understand that once you've run out of spending power, you might have a hard time handling the next financial emergency that comes along. Debt burden Debt burden is the ratio of your credit card balance to your disposable income. A higher percentage generally means more financial strain. Debt burden provides a more accurate idea of how hard it'll be to pay off credit card debt than just the balances alone. A $5,000 balance may be manageable for someone who takes home $10,000 per month, but not for someone who makes $2,500. Credit limit A credit limit is the maximum amount that can be spent on a credit card. In this case, a higher number is better and can be a sign of less financial strain. With a low credit limit, even a modest amount of debt could cause a drop in your credit score. When you have a high credit limit, you can spend more without worrying about maxing out your credit card or hurting your credit. You probably don't want to spend money just because you have the credit for it, but you have more flexibility to spend when necessary. States under the most credit card pressure Kentucky, Alabama, and Arkansas top the Credit Pressure Index as of April 2025. That doesn't mean people in these states have the highest credit card balances. In fact, debt relief seekers in several other parts of the country carry bigger balances on their credit cards. But residents of these states have high balances compared to their credit limits. In Kentucky, the average credit card balance is just under $13,000. The average estimated credit limit is $16,355. The typical cardholder looking for debt relief is already using nearly 80% of their credit. With that kind of utilization, any big expense puts you at risk of maxing out your credit cards. You might also be unable to afford to pay for something you need. Adding to the pressure is that incomes tend to be lower in these states. All three are in the bottom 10 by median income. Debt takes up a larger share of a person's disposable income in these states than it would in other areas where wages are higher. States with more credit card flexibility New York, Connecticut, and Massachusetts had the lowest credit card pressure as of April 2025. Their credit card balances are on the high side, but they make up for that with larger credit limits and salaries, so residents aren't under nearly as much financial strain. For example, debt relief seekers in Massachusetts might seem to have a lot of debt at a glance, with an average balance of $18,845. But the average estimated credit limit is $32,617, meaning credit utilization is about 58%. The average debtor still has nearly $14,000 in available credit-enough for most emergencies or to pay the bills. Massachusetts is also one of the top five states in terms of median income. Even though people carry more credit card debt, it's less of a burden because of their disposable income. What to do if your credit cards are maxed out If you've hit the limit on your credit cards, or you're getting close, here's what you can do to fix it. Step back and assess The first step is to gather some quick information. Pull up all your credit card accounts and make a note of the balances and credit limits. If you've maxed out your credit cards, then the balances and limits would be about the same. Next, look at your income, and check how much you'll have left over after paying your monthly bills, including your credit card minimum payments. You can use this information to figure out how quickly you'll be able to pay down your credit cards. Find support if needed Living with high credit card balances is often stressful, and the interest is costly. If your credit card balances are causing financial difficulties, you have options. Ask your credit card issuers for a credit limit increase. Card issuers are sometimes willing to raise your credit limit, especially if you've always paid on time. A higher limit could give you more breathing room. Note that asking for a credit limit increase only makes sense if: Your high balance was due to an expense that was out of your can afford to pay down your have a reason to need a better credit score right now. A higher credit limit could make your situation worse if you're not sure how your balance grew so much in the first place, or if you're already struggling to keep up. You could also try debt consolidation, where you apply for a loan to pay off your credit cards. Consolidating your debt could make sense if you qualify for an interest rate that's lower than what you currently pay. Consolidating doesn't get rid of your debt. It only moves it to a new loan. Once you use the loan to pay off your cards, you might be tempted to use the cards again. If you do, you could make your debt situation worse. Consider closing your credit card accounts while you pay down the loan. If you are experiencing financial hardship and your debt has become overwhelming, you may want to explore debt relief. A debt relief company could help you negotiate a debt settlement with each of your unsecured creditors. Settling a debt means that the creditor agrees to accept less than the full amount you owe, but considers it payment in full. Debt relief could help you take control of your debt while paying what you can afford, so you can get on the road to a better financial future. This story was produced by Freedom Debt Relief and reviewed and distributed by Stacker. © Stacker Media, LLC.
Business Journals
25-06-2025
- Business
- Business Journals
Freedom Debt Relief review: Are their services right for you?
From accidents to surprise medical expenses and more, several factors can significantly impact your financial stability. When faced with such situations, it's understandable to seek alternative funding options, like taking out a loan or using a credit card with the intent to pay it off completely. However, the odds are often against you. Factors such as accruing interest and rapid payment deadlines can derail your well-thought-out strategies. Consequently, it's unfortunately easy to slip into considerable debt. Fortunately, Freedom Debt Relief is here to help assuage these problems and navigate you through the tumultuous financial landscape. As a leading debt settlement company, Freedom has acquired strong reviews and glowing word of mouth. The first and most important step in overcoming debt is to understand it better. Grasping debt management options is essential for sustaining financial stability. By gathering the right insights, ranging from budgeting strategies to assessing professional resources, individuals can make informed choices that align with their long-term objectives. Here, through this in-depth review, you will better understand Freedom Debt Relief's services and how they can benefit you. About Freedom Debt Relief Freedom Debt Relief was founded in 2002 and is based in San Mateo, California. As part of the Freedom Financial Network, Freedom Debt Relief has become one of the country's most prominent and successful debt settlement company. As of 2025, the company has served over 1 million clients, settled over 5 million accounts, and surpassed a grand total of over $20 billion in settlements. Recognizing where debt begins In 2024, research revealed that over 65% of U.S. residents lived paycheck to paycheck. This means that most of the population cannot earn enough to get by comfortably from one pay period to the next. Living under these conditions makes it nearly impossible to build substantial savings, as all income is directed toward immediate necessities. While planning for long-term savings is admirable, it becomes significantly more challenging when short-term needs are so urgent. This indicates that over 65% of Americans are entirely unprepared for unexpected expenses. Consequently, when a significant financial need arises, they resort to alternative payment methods that lead to debt. Unsurprisingly, studies reveal that more than 80% of U.S. residents are currently in debt. Moreover, many residents struggling with debt are living paycheck to paycheck, making it nearly impossible to pay off their debts in the given timeframe. Consequently, they often face high-interest rates that increase the total amount owed, further complicating their efforts to escape this financial burden. This system is designed to ensnare individuals once they fall into it, and escaping can be exceptionally challenging for them. The importance of debt management High-interest debts can rapidly destabilize personal finances, making everyday living challenging for many Americans. Adopting comprehensive debt management strategies is the most effective way to alleviate these financial pressures linked to debt. Taking proactive steps, like debt consolidation or organized repayment plans, can help mitigate financial strain and lessen stress. This is precisely what Freedom Debt Relief specializes in. Freedom Debt Relief core services Debt settlement program A debt settlement is when you or a representative negotiates with the creditors to whom you are indebted, striving to reduce the amount you owe in exchange for an up-front payment. For example, suppose you owe ten thousand dollars to a creditor but are willing to pay 60% of that total in a lump sum right now. In that case, the creditor may very well settle, as that means they will acquire this amount now and be able to close out the case rather than continuing to hound you for more money. Freedom Debt Relief plays an integral role in negotiating with creditors. Because they have so much experience in the field and the company's reputation precedes them, creditors know they mean business. As a result, creditors are far more likely to make a deal with them than with others. Free debt evaluation Freedom Debt Relief offers a free consultation, in which they can assess your financial situation and offer you some upfront advice with no charge. During this consultation, they will outline what the company can do for you and how things would proceed should you choose to work with them. Dedicated account setup When you sign on with Freedom Debt Relief, they strive to provide a structure that will allow you to get out of debt and stay out of debt thereafter. As such, clients deposit monthly funds into a separate account for settlements, while accumulating funds for future use as well. Benefits of using Freedom Debt Relief No upfront fees. Potential for significant reduction in total debt owed. Professional negotiators handle creditor communications. Useful for those overwhelmed by unsecured debt. Potential drawbacks May negatively impact credit score. Creditors may still contact or sue clients during the process. Not all types of debt qualify (e.g., secured debts like mortgages are excluded). Requires commitment and consistent monthly payments. Who should consider Freedom Debt Relief Individuals may manage smaller debts independently, but more complex situations are better addressed with professional guidance. The perfect candidate typically has over $7,500 in unsecured debt and is finding it difficult to meet minimum payments. Freedom Debt Relief offers tailored programs, educational resources, and valuable insights into debt settlement strategies. Freedom Debt Relief provides a lifeline for those struggling with unsecured debt, offering structured programs, skilled negotiators, and a clear path toward financial stability. It isn't the perfect choice for everyone, but for those stuck in significant debt, Freedom Debt Relief may offer the support they need to regain control and confidently move forward.
