A new survey released by Bankrate.com draws attention to the need for credit counseling. About half of Americans have more in savings than they have in credit card debt. In 2015, 58 percent of people had more in savings than credit card debt. In 2016, it’s only 52 percent of Americans who have more in an emergency fund. More troubling is the fact that 1 on 4 have more credit card debt than savings. The study cited by a Fortune article also revealed 21 percent of people have no debt and no savings, which is also problematic. By receiving credit counseling, you learn to improve your credit score as well as budget, save and plan.
Covering unexpected expenses
If you have a credit card with a low balance, you can access credit in an emergency. At the same time, a person who has a substantial savings fund doesn’t need to worry. With money in savings, you can use a credit card for convenience with no worries about paying off the balance later. According to the Bankrate.com study, 38 percent of people can cover an emergency expense of between $500 and $1,000.
Lowering your interest rate
If you ran up credit card debt because of a series of emergencies outside your control, the good news is a credit counselor can help. By consolidating credit card debt and signing up for a debt management plan, you often dramatically lower the interest rate you pay. Having a lower interest rate makes paying off credit card debt more feasible. As far as what got you into the situation in the first place, realize you are not alone. Many people struggle with temporary unemployment, medical bills and family problems that make it difficult to budget.
Automating your savings
Experts suggest automating your savings, but it is also smart to set up automatic bill pay. When you enroll in a debt management plan, you have that option to have money automatically deducted out of your account to pay a monthly debt repayment bill. When it comes to how much you should save, look at your expenses including the debt repayment bill. If you can save up three to six months of living expenses, you are doing well. However, it is up to you how long it takes you to save up. With credit counseling, you have a trained professional helping you figure out your financial situation.
At Christian Credit Counselors, we know you can make your savings grow faster if you aren’t throwing money away with high interest charges on credit cards. For more information about boosting your credit score and improving your personal finances, please contact us.
Tackling credit card debt isn’t a task you have to accomplish on your own. Most people don’t get into an average of $15,000 worth of credit card debt alone. Whether you are a generous person who buys gifts or simply want to support your family, it’s not uncommon to rely on credit cards. According to a recent article by Huffington Post, not all debt is created equal. In fact, some experts view mortgages and student loans as investments in your future. With debt counseling, you learn how to best eradicate your credit card debt. Having good credit is important for meeting financial goals. According to Huffington Post, there are different weapons to attack debt. A certified Christian credit counselor advises you on the best strategy.
Some experts recommend you try a balance transfer to tackle credit card debt. Although you could get a lower interest rate, the problem is you are less likely to actually pay off the debt. In fact, many people run up even more credit card debt by adding a new credit card to the mix. Instead of a balance transfer, consider debt consolidation. After consolidating debt into one monthly payment, you have a real opportunity to see your credit card debt disappear.
Another option some experts recommend is to take out a personal loan to pay off credit card debt. With a personal loan, you have a certain amount of time to pay it off. You also get a set interest rate. According to Huffington Post, a personal loan is a good choice. If you aren’t sure whether you qualify, talk to a debt counselor about a Debt Management Plan that is similar to a personal loan. With a Debt Management Plan, you pay back all of your creditors. A credit counselors goes to bat on your behalf to help you obtain a lower interest rate. In the end, you take responsibility for what you owe your creditors. In many cases, people pay off their credit card debt 80 percent faster by agreeing to a Debt Management Plan.
Once you choose a strategy, stick to your plan. As time goes on, you will have more money in savings and less money owed to creditors.
Instead of tackling debt by moving balances around or taking out new debt, talk to a trained Christian credit counselor. At Christian Credit Counselors, we educate consumers about personal financial matters including debt repayment strategies, budgeting and saving. While there are pros and cons to balance transfers and personal loans, few experts can argue against debt consolidation. To avoid bankruptcy and debt settlement scams, talk to one of our counselors. For more information on debt counseling, please contact us.
Credit card debt is the “bad” debt that brings many consumers shame and embarrassment. However, people who seek credit counseling often learn about the positive methods for improving their credit scores. For many people, it’s a dream to boast about an 800 or perfect credit score. At the same time, having good credit isn’t just about bragging. Having poor credit is a road block that can stop you from achieving many of your personal, professional and financial goals. According to a recent article by USA Today, one NerdWallet study showed 70 percent of people believe credit card debt is the worst kind of debt you can have. In fact, overall Americans under report their credit card debt to the tune of $415 billion. While lenders reported $683 billion worth of credit card debt that is outstanding or yet paid, borrows only reported $268 billion. By facing your debt with credit counseling, you start on the way to an honest, fruitful and positive life with all of the financial blessings.
When you go to buy a car
Your credit score affects you when you go to buy a car. If you can’t get approved with a traditional loan, you will have to save up cash or get a less desirable loan. People with poor credit often have to agree to special terms such as buying gap insurance, a warranty and other expensive add-ons. With credit counseling, you find out about debt consolidation so you wipe out all of your credit card debt. Once you have no credit card debt, it is typically easier to get a good car loan.
When you go to buy a house
When you go to apply for a mortgage, lenders look at your debt-to-income ratio. With credit counseling, you find out how to save up for a down payment as part of your budget. Even more important, you consider a debt management plant to get out of credit card debt. With no credit card debt on the “debt” side of your debt-to-income ratio, you will likely struggle to borrow more money for a home at a lower interest rate.
When you go to get a job or rental
Some employers run a credit report when you apply for a job or a rental home or apartment. When you talk to a certified credit counselor, you learn how to improve your credit score. While it is easy to get behind on paying credit card bills, it is also an achievable goal to live a debt-free life. Your credit score affects your ability to live in a nice home or land some jobs.
At Christian Credit Counselors, we help many of our clients get out of debt with a debt management plan. We negotiate lower interest rates on all of your credit cards and provide you with an option to make automated monthly payments. For more information on credit counseling benefits, please contact us.