One Crisis Away: Despite Earning $90K, Family Is Drowning In Credit Card Debt
Debt isn’t something limited to folks with low paying jobs. The typical Texan carries nearly $4,700 in credit card debt. Here’s the thing: That balance tends to increase as income goes up.
One North Texas family is making no real progress paying down a cache of credit cards despite bringing home $90,000 a year. Their story is the latest in KERA's series One Crisis Away: Drowning In Debt.
Brenda and Rene Munguia both have full time jobs they love. She works in the total loss department at GM Financial He works for MidTech International as an auto painter.
Making A Little Extra On The Side
Rene’s also has a home auto shop in Ovilla, 20 miles southwest of Dallas. He paints cars for friends and neighbors on the side. That's extra income Brenda and Rene rely on. They’re about $30,000 in debt.
“It’s like $25,000 in credit cards, and a little over $6,000 in medical," says Brenda.
This debt didn’t come on after a job loss, or a major purchase. It happened when Brenda was off work for about eight weeks recovering from hand surgery. She had to pay her health insurance deductible and some doctor’s bills up front. Short term disability only paid 60 percent of her salary.
That was enough to throw the whole budget off balance.
“You try and borrow from Peter to pay Paul and you know just get deeper into debt and by the time, you know, you’re starting to buy groceries with credit cards, get gas with credit cards, and it’s just a never-ending story," she says.
The Minimum Payment Hamster Wheel
And with $25,000 weighing down the credit cards—Rene says they can’t afford much more than the minimum payment each month.
“I feel like it’s never going to get paid off, number one. Because if you make the little minimum payment you’re never going to finish, period," Rene says. "And then what happens is we end up rolling it into another card with a lower interest and it goes and it goes and it goes and you never finish.”