Credit card debt is a problem for people of all ages. Experts say cash-strapped college students often live on credit. Meanwhile, young couples use credit cards for miscellaneous wedding and honeymoon expenses. Retired people often use credit cards to supplement their Social Security income. With debt counseling, you learn about different ways to get out of credit card debt including debt consolidation. According to a recent article by U.S.A. Today, the average family in American owes about $15,000 in credit card debt. Paying off credit card debt once it surpasses your yearly income is especially difficult and feels impossible.
Consolidating debt the right way
Some people open a low-interest rate credit card to consolidate their credit card debt. In many cases, people with low credit scores can’t even get a low-interest credit card. Instead sign up for a debt management program that lets you pay off debt with a specific monthly plan. Your creditors get on board. Most consumers love the fact that they don’t have to negotiate a deal because credit counselors work behind the scenes to help you. If you have credit card debt that totals half or all of your yearly income, a debt management plan is ideal. Your creditors work with the income you have. They often lower the interest you owe and forgive late fees.
Making the minimum payment, for now
Continue to make the minimum payments on your credit card until you get everything set with a debt management plan. Another possibility with debt counseling is that you develop a budget and strategy to pay more than the minimum on some credit cards. The point of paying at least the minimum is to keep your credit score at a healthy level. With debt counseling, you learn all the tricks and tips for improving your score over time.
Asking for a better interest rate
Experts say if you have a credit score of 710 or higher, you can often ask creditors for a better interest rate. Of course, most people struggling with credit card debt also struggle with a low score. Receiving debt counseling gives you an edge because you find out about debt consolidation for a reduced interest rate on credit card debt. Boosting your score is key to better personal finances. Once you reach the 700 or 800 mark, it’s easier to get mortgages, car loans and lower interest rates.
Making two minimum payments a month
Another tip is to make two minimum payments a month on a particular credit card. By doing that, you reduce the balance owed and pay off the debt quicker. Making two minimum payments is a good holding strategy until you can pay off your debt completely with a debt management plan. If you get paid twice a month, you can often budget to make credit card payments with each paycheck.
At Christian Credit Counselors, we help consumers battling credit card debt and desiring a more positive financial future. For more tips on how to quickly improve your finances with debt counseling, please contact us.
Wishing away your debt does not get you too far, but there are foolproof plans to pay off credit card debt. With debt counseling, you figure out how to keep your finances in check so you feel empowered in all parts of your life. Debt affects not just your physical surroundings, but your spiritual and emotional health. According to an article by U.S. News & World Report, the average American household has about $7,300 in credit card debt. The article interviewed author Beverly Harzog, who wrote the book, “The Debt Escape Plan.” After receiving debt counseling, consumers often devise a budget and plan so they don’t rely on their credit cards as they should an emergency fund. Interestingly credit card debt appears as a greater problem for women in the 18 to 24 age category with 63 percent of females carrying credit card debt compared to only 36 percent of men. It’s not just younger women who carry more credit card debt. A study showed 66 percent of women versus 33 percent of men in the 55 to 64 age category carried credit card debt. Whether you are male or female, consider some of the author’s tips to escape debt.
Making specific goals
A credit counselor helps you come up with financial goals. Experts such as Harzog recommend making specific goals with a timeline. She says the most difficult part is just getting started. By receiving debt counseling, you motivate yourself to nail down specific financial goals.
Cutting back instead of eliminating
Instead of trying to do without certain pleasures, the author suggests scaling back on lifestyle choices. Maybe you can’t give up coffee, but at least choose a less expensive brand. Instead of giving up pedicures, look at your history and make adjustments. If you used to go every other week, go once a month.
Knowing your triggers
With debt counseling, you often identify your spending triggers. For some people, the spending trigger is looking at sales on the Internet or shopping at particular stores. If you tend to buy more when you shop with your sister, consider exercising or going to the library with her instead.
Consolidating your debt
Experts recommend people make more money and consolidate debt. Making more money involves starting a side gig and working overtime. Consolidating debt is easy with a debt management plan through a credit counseling agency.
Once you pay off debt with a debt management plan, you feel free and enjoy your other goals in life. At Christian Credit Counselors, we provide debt counseling to consumers. For more information on consolidating debt, please contact us.
When you are drowning in debt, it is so hard—maybe impossible—for you to take advantage of many of the luxuries we have access to here in America. Maybe you started out in luxury, living outside of your means. But now have more debt than you can handle and are wondering how your next paycheck will even cover your bills. Receiving credit counseling could be a great option for you. Christian Credit Counselors is a non-profit organization that wants to help get you on the right track so you can pay off your debt and start paying for the things you need to and want to be paying for that you haven’t been able to. Here is a list of the top 5 things you could do after receiving credit counseling.
Pay off debt. This is a huge one. It may take a few years but it will take a lot less time if you consolidate your debt and start paying a lower interest rate.
Build your savings. Any smart person has an emergency fund of savings for those times when things just come up. The bigger the emergency fund, the fewer life events will seem like emergencies.
Start saving for retirement. Hopefully you have already been doing some of this but if not, after paying off debt it is time to start! Set yourself up for a successful future.
Save for your kids. Many parents like to have a college fund for their kids so they don’t have to start off their careers in debt. With college costs continually on the rise, your children will be thankful for whatever you can give them.
Actually have some fun! Once you don’t have debt looming over your head, you can save money for vacations, that new camper or boat you’ve been eyeing, or whatever else your heart desires.
If this sounds like a distant dream to you, contact us today at Christian Credit Counselors. We can turn this dream into a reality.