MEMPHIS, Tenn. – Americans owe more than one trillion dollars of credit card debt.
Memphis is home to the highest rate of severe credit card delinquency among young adults, according to Federal Reserve data.
FOX13 is searching for solutions.
Drowning in debt
David Davis was stressed and stretched beyond his means.
The 67-year-old Whitehaven retiree told FOX13 he needed $1,000 to fix his 2011 Escalade.
“My plan was to, you know, get the money that I need, and then pay it right back off,” he explained.
Davis turned to a title lender.
However, he said his interest rate of 29% quickly exploded to “like 700%.”
He’s not alone.
Other people rack up debt due to medical expenses, emergencies, or overspending on credit cards.
According to a 2022 report from the Hope Policy Institute, Memphis has 114 high-cost lenders.
That’s more than twice the number of McDonald’s and Starbucks combined.
Option #1: Forward Memphis
Consider low-interest loans with a nonprofit like Forward Memphis.
“When an emergency happens and life happens, it’s easy to just get into a financial bind,” explained Travis Moody, the CEO of Forward Memphis.
Moody knows firsthand how hard this can be.
The Hamilton High graduate and his wife paid down $100,000 of loans and credit card debt in three years.
“This was the first time I saw my wife crying because of something I had done,” he explained. “You know, we had made a decent income. We had, you know, tried to do the right things as best as we knew, but we found ourselves in trouble.”
After overcoming his own financial hardship, he wrote a book called “Financial Breakthrough: God’s Plan for Getting Out of Debt.”
Two years ago, he launched Forward Memphis to help people experiencing financial hardships in Memphis.
You can get up to $5,000, but only if you agree to financial counseling.
Half of that is grant money.
The other half is a loan at ten percent interest.
“If you have some income, at least $30,000 in annual household income, there is a solution that works for you, and we’re here to help,” Moody explained.
Click here to apply for help with Forward Memphis.
Option #2: Greater Memphis Financial Empowerment Center
Another free option to get out of debt is to get counseling with the government-run Greater Memphis Financial Empowerment Center.
“Whether you need a counselor this week, yesterday or two years from now, you have an assigned counselor you can deal with on a one-on-one basis,” explained Shelby County Trustee Regina Newman.
Trustee Newman told FOX13 their counselors have met in person and virtually with people from every zip code in Shelby County.
In six years, she said 2,300 clients have paid off $7 million in non-mortgage debt.
“The one-on-one counseling works, and especially when it’s free!” she said. “Did I mention it’s free? It’s free!”
Click here to apply for counseling with the Greater Memphis Financial Empowerment Center.
Option #3: The DIY Approach
“Even though it’s scary, the end result is worth it,” said LaTina Benson, the founder of Moore Financial Services. “It eliminates the stress.”
Benson told FOX13 everyone should start by tallying up their income and expenses.
You could be spending more money than you’re earning.
“Oftentimes, I find that people are just don’t know what their numbers are,” she explained.
After assessing your situation,
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Look for side hustles to add extra income
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Consider where you can cut back
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Stick to the budget you build
“I have clients I talk to and they do not realize how much they’re spending on fast food,” Benson laughed.
If you’re still drowning in debt, consider
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The Snowball Method: Pay down debts smallest to largest
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The Avalanche Method: Pay off the highest interest loan first (saving money in interest)
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Consolidate your loans (pay them all off at once under a lower interest rate)
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Consider a zero balance transfer credit card (you may have a fee of three to five percent)
Benson encouraged families to act quickly before their debt spirals out of control.
“I deserve better, I can do better,” she told families. “There are options available. I tell people, turn off the TV – after you watch FOX 13 News – and put your phone down. Stop scrolling, invest in yourself.”
Debt in the rearview mirror
Davis ultimately found the help he needed through Forward Memphis.
“You’re slowly sinking and you’re reaching for help, you know,” he said.
With his debt in the rearview mirror, Davis wants to drive others down the path of financial freedom.
“It’s a lonely road,” he said. “But some roads you have to walk to get to a destination, you know?”
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