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Ask Chuck: Move Back from the Financial Cliff

By: Crown Financial Ministries, Chuck Bentley

Dear Chuck,

Our finances are stretched so thin that I am stressed out all the time. We live on a budget, but my husband and I both need some hope that it will not always be this way.

Living on a Financial Cliff

Dear Living on a Financial Cliff,

There is certainly reason for hope, so hang on!

Let’s put your challenges in a current economic context and then a Biblical context before I offer some practical tips to help you through this painful time.

Economic Context

With the lingering impact of inflation, a new CNBC survey reports that 70% of Americans say they, too, are feeling financial stress, and 58% report they are living paycheck to paycheck. The report pointed to several specific concerns, including a lack of savings and a dependency on debt.

“People are worried that the money they’ve saved won’t last and are worried they’re going to have to lean more on their credit cards and other sources of debt just to get by,” said Bruce McClary, a senior vice president at the National Foundation for Credit Counseling.

With rapidly increasing costs, higher interest rates, and a sense of economic uncertainty in the air, many are feeling like their finances are balanced on a razor’s edge with no margin for error.

Biblical Context

The Bible is full of people who had to face incredible amounts of stress. It is also full of principles and truth that help us to reframe our present circumstances. I am reminded of Romans 8:18–21:

I consider that our present sufferings are not worth comparing with the glory that will be revealed in us. For the creation waits in eager expectation for the children of God to be revealed. For the creation was subjected to frustration, not by its own choice, but by the will of the one who subjected it, in hope that the creation itself will be liberated from its bondage to decay and brought into the freedom and glory of the children of God. (NIV)

We live in a fallen world—in bondage to decay—because of mankind’s disobedience to God, but a promise of freedom and redemption awaits those who are children of God. Considering our eternal future, our present trials and tribulations are insignificant. Remember to keep your present cares and burdens in the context that this is not our home. We temporarily manage what God provides and seek to be faithful until we have finished our race.

Help in Reducing Your Financial Challenges

Three very practical steps will help you reduce the immediate pain you are in.

First, no matter how much or how little income you have each week or month, be sure that you are spending less than that amount. Think of the old game of limbo, where you have to bend your body to get under a bar without knocking it off. The bar represents your income. Your attempts to get under it represent your control over your spending. That is why a budget is so very helpful. You can adjust your expenses to ensure that you never exceed the height of the bar (your weekly or monthly income).

Second, build an emergency savings fund. You need at least $1,000 set aside to help with unexpected expenses. That is the bare minimum. Set a goal of saving three months of overhead. Emergencies always happen, so this is non-negotiable. In the CNBC survey, most of those who report living paycheck to paycheck say they do not have any money saved. This is like flying through the air on a trapeze bar without a safety net. It is scary! Crown has some free tools to help you get that accomplished. Perhaps you need to adjust your budget. You might benefit from our budgeting resources and a coach.

Finally, make a plan to reduce your debt and break any dependence on credit cards, store accounts, buy-now-pay-later plans, or payday loans. The largest expense in most American budgets today is the interest expense on debt. Just imagine how free you would feel without debt hanging over you each month. We partner with Christian Credit Counselors to help free people from this burden.

Thank you for writing. Please know that we want to help! May God give you His peace and the freedom you so desire.

Christian Credit Counselors is a trusted source of support in assisting people with getting on the road to financial freedom. Reach out to them today; they may be of great benefit to you.

Credit Cards, Credit Counseling, Debt, Debt Consolidation, Debt Settlement, Finance, Loans, Money Management, Mortgage, Student Loans

Protect Yourself Financially from the Impact of COVID-19

By: Consumer Financial Protection Bureau (CFPB)

Steps to take if you have trouble paying your bills or meeting other financial obligations

If you have trouble paying your bills/loans or paying on time, there may be a number of options to help, especially if you reach out early to your lenders or creditors.

Contact your lenders, loan servicers, and other creditors

If you’re not able to pay your bills on time check their websites, to see if they have information that can help you.

The CFPB and other financial regulators have encouraged financial institutions to work with their customers to meet their community needs.

If you can’t make a payment now, need more time, or want to discuss payment options, contact your lenders and servicers to let them know about your situation. Being behind on your payments can have a lasting impact on your credit.

Credit card companies and lenders may be able to offer you a number of options to help you. This could include waiving certain fees like ATM, overdrafts, and late fees, as well as allowing you to delay, adjust, or skip some payments.

When contacting your lenders, be prepared to explain:

Your financial and employment situation
How much you can afford to pay
When you’re likely to be able to restart regular payments
Be prepared to discuss your income, expenses, and assets

Work with housing and credit counselors to understand your options

These trained professionals provide advice for little or no cost, and they will work with you to discuss your situation, evaluate options, and even help you negotiate with your lenders and servicers.

HUD-Approved Housing Counselors. The U.S. Department of Housing and Urban Development (HUD)-approved housing counselors can discuss options with you if you’re having trouble paying your mortgage loan or reverse mortgage loan. This may also include forbearance or a modified payment program.
Credit Counselors. Reputable credit counseling organizations are generally non-profit organizations that can advise you on your money and debts, and help you with a budget. Some may also help you negotiate with creditors. There are specific questions to ask to help you find a credit counseling organization to work with.

Warning: If you’re considering working with a debt settlement company to address your debts, be skeptical of any company that promises to do it for an upfront fee.

Trouble paying your mortgage?

If you can’t pay your mortgage, or can only pay a portion, contact your mortgage servicer.

It may take a while to get a loan servicer on the phone. Loan servicers are experiencing a high call volume and may also be impacted by the pandemic.

Visit our blog on mortgage relief options for in-depth content to help you understand your forbearance options and avoid foreclosure in light of the coronavirus and the recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act.

If you are renting from an owner who has a federally backed mortgage, the CARES Act provides for a suspension or moratorium on evictions. Read more in our renter section of the mortgage relief blog.

Trouble paying your student loans?

If you have student loans, you have options.

If your loan is held by the federal government, your loan payments are postponed with no interest until September 30, 2020.

For other kinds of student loans (such as a federal student loan held by a commercial lender or the institution you attend, or a private student loan held by a bank, credit union, school, or other private entity) contact your student loan servicer to find out more about your options.

Read our FAQs to learn more about what you can do.

Trouble paying your credit cards?

If you’re unable to pay your credit cards, talk with your credit card company and let them know that you cannot make a payment. You may get relief.

You may also want to work with a credit counselor. Reputable credit counseling organizations are generally non-profit organizations that can advise you on your money and debts, and help you with a budget. Some may also help you negotiate with creditors. There are specific questions to ask to help you find a credit counseling organization to work with.

Trouble paying your auto loan?

Your lender may have options that will help. Our tips include changing the date of your payment, requesting a payment plan, and asking for a payment extension

How to work with your bank or credit union

With many of us staying home to help flatten the coronavirus curve, online banking allows you to handle your finances from the comfort of home. Here are some tips for people who are new to online or mobile banking.

Generally, all bank deposits up to $250,000 are insured by the Federal Deposit Insurance Corporation. Deposits at all federal credit unions, and the vast majority of state-chartered credit unions, are also insured up to $250,000 by the National Credit Union Share Insurance Fund (NCUSIF).

How to work with debt collectors

If you currently have a debt in collections, you can work with collectors to identify a realistic repayment plan.

The Bureau offers a number of resources for contacting and negotiating with debt collection companies, especially as we deal with the impact of the coronavirus.

What to do if you lose your income

State and local governments vary in the programs and offerings to help those financially impacted by the coronavirus.

You can look to your state’s unemployment policies to identify current options for benefits. The recently passed CARES Act allows states to extend benefits to self-employed and gig workers, and to provide an extra $600 per week as well as an additional 13 weeks of benefits. Your state’s public health office may also have information.

Older adults may be impacted by the coronavirus and quarantine procedures in different ways than the general public. There may be government benefits available to older adults who need financial help. Visit benefitscheckup.org for more information and to see if you qualify for any state or local assistance.

Be aware of potential scam attempts

Scammers look for opportunities to take advantage of the vulnerable, especially during times of emergencies or natural disasters. Be cautious of emails, texts, or social media posts that may be selling fake products or information about emerging coronavirus cases.

Click here for more information on scams specific to the coronavirus.

The Federal Trade Commission has tips to protect yourself from possible coronavirus-related scams. The FTC and the Food and Drug Administration have also cautioned consumers to be on the look-out for sellers of unapproved and misbranded products, claiming they can treat or prevent coronavirus.

Learn more about how to prevent, recognize, and report fraud and scams.

Credit, Credit Cards, Credit Counseling, Credit Score, Goals, Money Management, Personal Goals

Turning Financial Resolutions into Regular Routines

By: Brittany Frost

We are now more than a month into 2017 which begs the question: how are your financial New Year’s resolutions coming along? What steps have you taken so far to reduce your debt or save money? Maybe you’ve been so busy that you have yet to make a financial resolution this year. If so, don’t worry! December isn’t the only time for resolutions. It is never too late to resolve to take control of your finances toward a better financial future. According to a NBC News article, the most popular resolution in 2017 was “getting healthy” with specific interests in gyms and fitness (Ref. #1). Don’t forget: financial health is also important! However, if one big financial resolution overwhelms you, it may help to set mini-resolutions that are more achievable and may be easier to keep. Switch them up so they aren’t so daunting. Start now! Trim your debt and get your credit in better shape! Choose at least one of the following tips to create your own mini-resolutions today:

If you haven’t done so in a while, go to annualcreditreport.com to pull your 3 free annual credit reports from Experian, Equifax, and TransUnion. Even if it’s scary, you need to know your credit in order to improve it.
Pay cash for gas each month to keep it off your credit card so your balance will be lower on the next statement. 30% of your FICO credit score is calculated based on “amounts owed” so pay with cash to help keep your balances low and do not use a high percentage of your available credit (Ref. #2).
Use a free app or paper to record every dime you spend so that the money is earmarked when you pay your credit card bill! 35% of your FICO score is calculated based on “payment history” so record and budget to pay ON TIME and in full if possible (Ref. #2).
Go to myfico.com to learn more about how your FICO score is calculated and use that as a guideline to improve your credit.
Try not to eat out for one week. “Brown-bag” it to save money.
Instead of paying for a baby-sitter, swap out watching kids for free with friends.
Negotiate everything; not just houses and cars but hotel rooms and other items. It’s always worth a try.
Don’t just take something at face value. Shop around to compare and find the lowest price before purchasing. For example, it may be cheaper not to bundle insurance. Instead, get separate quotes from an independent agent on auto, home, and life insurance to find the best price for each.
To keep the cost of holidays/birthdays down, give homemade gifts of baked goods or food instead of pricier, store-bought items.
If and when you get a tax refund this year, vow to put it directly toward bills or your debt with the highest interest. Resist the temptation to splurge! It will only hurt you in the long run.

You can make resolutions any time, but the sooner the better! The key to making and keeping resolutions is not to dwell on the past, but to learn from what DIDN’T work and focus on what DOES work. Even if they seem small now, forming healthy financial habits every day can make a big difference in a year. Give your finances the time, attention, and exercise they need to get back in shape in 2017 and, before you know it, your financial resolutions will turn into regular routines!

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.

References

Credit Counseling

Top 5 Things You Could Do After Receiving Credit Counseling

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.

Credit Counseling

Credit Counseling and Other Ways to Get More Conscious About Spending

One of the reasons people get into debt is they spend almost effortlessly without any real thought. By submitting to credit counseling, you actually take back control of your personal finances. When it comes to money, it’s all about staying in the present. Take a mindful approach by creating awareness of your financial habits and credit card debt. With credit counseling from an established Christian credit counseling agency, you can trust the advice you get based in positive core values and Christian principles. According to a recent article by time.com, it’s quite common for extra expenses to creep up over time until you notice you’ve reached a credit limit. The article points out a BlackRock survey of wealthy people showing almost half believe inflation is a high risk to their personal finances. Other top concerns include an expensive mortgage that prevents them from saving for retirement. To get spending under control, your credit counselor will assist you with four simple financial habits and practices.

Getting a simple budget in place

Your budget does not have to complicate your life. In fact, it is extremely simple to reduce anxiety. Experts with Bankrate.com say one fifth of people in the U.S. do not even have a budget. Another one fifth of people walk around with a “mental budget,” in their minds. When you meet with a Christian credit counselor, you design a budget that is similar to a life’s mission statement. The process starts by collecting all of your credit card statements and evaluating the real possibility of debt consolidation.

Using more cash

Another tip is to use more cash to pay for what you need and want. Sadly, experiments find that people with credit cards willingly pay as much as 80 percent more for something they want compared to people using only cash. Stick to your gut instinct by putting credit cards away while paying down debt with a debt management plan. A debt management plan often rewards you with a lower interest rate while you meet your financial obligations.

Going retro with finances

Whether you are a baby boomer who remembers the days of using post-it notes and cash or a young millennial who does everything online, consider a few retro practices to keep it real. Using a post-it note or piece of paper with your financial goal written on it encourages you to reduce spending when you stick the note around your debit card. As far as harnessing technology, use it to remind yourself constantly of how much you spend. Sign up for notifications that remind you anytime you use your bank car. Keep track of your spending online and on paper.

At Christian Credit Counselors, we work hard to help our clients manage their finances and get out of credit card debt. We also help you lift your credit score. For more tips on controlling spending, please contact us.

Credit Counseling

Credit Counseling Results in Household Drop in Credit Card Debt

As more consumers receive credit counseling, an incredibly positive result is a drop in household credit card debt. According to a recent piece by nerdwallet.com, household debt for American consumers went up this year, but mainly due to mortgage and student loan debt. The good news is credit card debt went down by 3 percent. For people who sign up for a debt management plan, credit card debt quickly becomes a burden of the past. The Nerd Wallet research showed the average debt balances for different types of debt. By eliminating credit card debt, it’s easier to tackle all other kinds of debt including mortgages, auto loans, student loans and personal loans.

Looking at the average balances

Sometimes it’s fun to compare yourself to other consumers, getting an idea of what kind of predicament other people face with their finances. A Christian credit counselor gives you complete privacy and helps with a positive approach. Instead of reinventing a formula for success, consider consolidating credit card debt. The debt consolidation approach works for many people who want to find financial peace. As far as average balances, Nerd Wallet found in just one-quarter or three months, credit card debt went down about 3 percent while mortgage debt went up almost 2 percent. Student loan debt went up 1.69 percent.

Figuring out your net worth

When you receive credit counseling, you lay everything out on the table as far as credit card bills. It’s also good to get a financial checkup. Figuring out your net worth is a simple calculation that involves adding up all of your equity, assets, money and then subtracting what you owe. The Nerd Wallet study showed the average balance on mortgage debt is about $171,000. The average auto loan balance is about $27,000, while the average student loan balance is about $49,000. The average credit card debt is much less at about $15,000, but the interest rate on credit card debt is significantly higher. Paying off credit card debt with a debt management plan is a key secret to financial success.

At Christian Credit Counselors, we help you improve your credit score over time with financial education and tools. We help consumers get out of credit card debt by positively confronting their debt. Talk to us about how we work with creditor to lower your interest rate and work out a plan. For more information on credit counseling, please contact us.

Budgeting, Christian Credit Counselors, College Debt, Consumer, Coupons, Credit Cards, Credit Counseling, Credit Score, Debit & Your Credit Score, Debt, Debt Consolidation, Finance, Freebie, Holiday Tips, Kids & Money, Money Management

10 Back-To-School Shopping Tips that Save Money

To your kids, shopping for new clothes, gear, and school supplies may be the only good thing about going back to school, but that doesn’t mean you have to spend a fortune every year. Here are 10 great ideas for how to get everything they need and save a few bucks doing it.

Hold off buying trendier gear

Kids may love a certain lunch box or pencil case they find in July, but once they start school and see that their friends are all using another kind, they’ll beg you to upgrade them, and that only results in wasted cash.

Shop end-of-summer sales

You know as well as we do that kids wear short sleeve polo shirts all year long, so hit the big summer sales and snap up discounted duds that can be worn well into fall.

Stick to the list

The teacher’s supply list at the start of a new school year is daunting enough so don’t waste time and money on unlisted items. Extra supplies, while they may be cute, will probably never get used and just leave your pockets empty.

Head to the supermarket for basic supplies

Check weekly circulars for great deals on pens and loose-leaf paper, and get your weekly grocery shopping done at the same time. Bonus: buying everything in one place will save time and gas money!

Let the kids raid your cabinets

The kids can select home-office supplies and then personalize them in unique ways. For example, decorate inexpensive plain, white binders with digital photos by creating a collage and inserting the page into the plastic outer cover.

Host a back-to-school swap

Round up a couple of other moms with kids the same gender as yours but different ages, and host an annual clothes swap. Trade toys and books, too! You’ll save a bundle.

Plan lunch

When you’re in charge of what your child eats, you’ll save yourself money. Check the weekly circulars at your local supermarkets for sales. If turkey isn’t on sale one week and ham is, go for the ham!

Buy bright

Lost school supplies may be a given, but gear that’s hard to miss can stave off the inevitable. Pack all their pencils, erasers, and other goodies into a bright backpack or pencil pouch to keep them from disappearing.

Shop the big three

Old Navy, Gap Kids, and The Children’s Place rotate merchandise often. Ask when they do their markdowns so you can grab the deals. Also, if you see an item you bought in the past 14 days on sale later, you can get the difference refunded, you don’t need the clothing, just the receipt.

Browse craigslist.org

Yes, you can find top-quality stuff on the cheap, but you can be a seller, too. Why not get some cash for that barely worn, now outgrown brand-name outfit? Just enter your location and click on “Baby and Kids.”

By: Parenting.com

Budgeting, Christian Credit Counselors, College Debt, Consumer, Coupons, Credit, Credit Cards, Credit Counseling, Credit Score, Debit & Your Credit Score, Debt, Debt Consolidation, Debt Settlement, Goals, House, Kids & Money, Money Management, Personal Goals, Saving, Student Loans, Uncategorized

Use the Start of the School Year to Set the Stage for Your Child’s Financial Success

By: Brittany Frost

Where did the summer go? As the school year rapidly approaches, children are preparing for the academic and social journey of the next grade level while parents are bracing their financial situation for the costs of continuing education. Parents can take this golden opportunity to go above and beyond just shopping for school supplies at Wal-Mart and, instead, show their children how to budget, save, and spend their money in order to teach them how to financially prepare for school (which will undoubtedly come in handy for college).

Alarmingly, a study released in July by the FINRA Foundation estimated that almost two-thirds of Americans couldn’t pass a basic financial literacy test, including calculating interest payments correctly (See Ref. 1). When you pair that with the fact that public, in-state college tuition, room, and board has risen 1300% since 1971 (See Ref. 2) and a recent survey showing that 75% of U.S. workers have student loan debt so high that they contribute less to their retirement (See Ref. 3), it is easy to see why parents must take every opportunity to educate themselves and their children so they do not end up in pools of unmanageable student loan debt. It is never too early to avoid the debt cycle and teach your children to financially prepare for school. Think about it: Did you or do you still struggle with enormous student loan debt? Did you avoid college altogether because you couldn’t afford it? Or did you have the financial means or knowledge to keep your student loan debt to a minimum? Either way, think of your financial mistakes, trials, and triumphs and use the start of this school year to teach your children everything you’ve learned about financially preparing for school. Use your experiences along with the following resources and ideas as motivation to set the stage for your child’s financial success or, perhaps, to change your own path.

So how can you do this? Include your child in the financial process of preparing for school. Sit down and discuss with them. Educate them on the difference between a “want” and “need” so they can decide what they need for school. Ask for their opinion and listen. Use free online budgeting tools available on www.christiancreditcounselors.com to set a budget together. Discuss and research ways to stick to that budget by using free resources such as Passionate Penny Pincher’s Free Back-to-School Cheat Sheet for a complete list of back-to-school deals. Record and track your spending. Make back-to-school shopping a learning experience through mathematical games. In “7 Smart Ways to Save on Back-to-School Clothing,” Deacon Hayes also suggests tips like assessing your child’s current school inventory, visiting thrift stores first, and adding in a fun but frugal activity such as stopping for an inexpensive lunch or treat to make back-to-school shopping a happy experience (See Ref. 4). Above all, just enjoy spending time and working toward your financial goals together as a family. By doing this, you will not just be buying more pencils and notebooks, but you will be setting the stage for the financial success of your children AND yourself. Here’s to a successful school year!

References

1. Farber, Madeline. Fortune. Nearly Two-Thirds of Americans Can’t Pass a Basic Test of Financial Literacy. 12 Jul. 2016. http://fortune.com/2016/07/12/financial-literacy/

2. Jacoby, Jeff. The Boston Globe. Making college ‘free’ will only make it worse. 13 Jul. 2016. 18-20. http://c.ymcdn.com/sites/www.ncher.us/resource/collection/6E4F0103-05C8-4F48-844E-BEEAC285C10B/db0714_2016.pdf

3. O’Connell, Brian. The Street. 75% of U.S. Workers Say High Student Loan Debt is Crippling Their Retirement. 12 Jul. 2016. https://www.thestreet.com/story/13627148/2/75-of-u-s-workers-say-high-student-loan-debt-is-crippling-their-retirement-savings.html

4. Hayes, Deacon. U.S. News Money. 7 Smart Ways to Save on Back-to-School Clothing. 15 Jul. 2016. http://money.usnews.com/money/blogs/my-money/articles/2016-07-15/7-smart-ways-to-save-on-back-to-school-clothing

Credit Counseling

Opt for Credit Counseling Before Your Debt Gets Out of Hand

It is easy for debt to become overwhelming, especially when you do not have a concrete plan for eliminating it over a set period of time. Many individuals will let things fester for a while, thinking that they will eventually start making more payments when they become more dedicated or get a raise. If you do not feel completely confident with your plan to get rid of debt, you should get credit counseling.

Let Professionals Guide You

While you may have your own expertise, you can get guidance from a professional who knows their finances. Instead of struggling to come up with your own financial plan, you can follow a path that is guaranteed to leave you in a positive financial position after everything is said and done.

Tackle the Issue Early On

If you do not manage to catch your looming financial issues early on, you may end up digging yourself a huge financial hole, in which climbing out becomes even more challenging. By catching it early on, you will not only take a huge step by asking for help, but you will set yourself up for a bright financial future.

Live Positively

Problematic finances can easily keep someone from feeling happy on a daily basis. It is a problem that does not just go away, so it requires direct action to start making progress. Getting credit counseling is the first step towards making a change that will help you live your life positively.

The longer you remain in debt, the more money that you pay towards interest charges. These charges can prevent you from making any progress on your debt, even when you are making consistent payments.

Asking for help can set you on the right financial path, so please contact us today.

Credit Counseling, Debt

Debt Counseling When You Aren’t Sure if It Is Ever OK to Pile up Debt

New Federal Reserve Data shows Americans owe the most revolving consumer debt since 2009. With so many people acquiring more credit card debt, you might wonder if it’s ever OK to pile up credit card debt. With debt counseling, you get the answers to enigmatic personal finance questions. According to a recent article by Bloomberg.com, a lot of cardholders carry debt from one month to the next. With a high interest rate, consumers often pay a large portion of their monthly budget to debt. While a high credit limit doesn’t obligate you to spend more, some people can’t resist using all available credit. Typically, credit card debt is negative. However, when you use credit cards responsibility, they can often serve purposes. Debt counseling helps you figure out not only how to get out of debt but how to improve your credit score so you can borrow in the future.

Using credit for job hunting

A study by the National Bureau of Economic Research found credit cards assist job seekers striving to turn their lives around for the better. If you faced unemployment in the past, you most likely needed help paying for work clothing, tools or gas to get to interviews. The study found a higher credit limit gave job seekers time to find a better job. By receiving debt counseling, you learn how to save for emergencies or job losses so you remain prepared for unpredictable situations.

Tapping credit instead of retirement

Another time when it pays to use credit cards is when you feel tempted to use our retirement funds. If you have to pay a 10 percent penalty to the IRS as well as pay taxes on an early distribution from a retirement plan, you lose money that could have grown for your future. Debt counseling gives you a chance to reflect on the best ways to handle financial tight spots. Also, you will likely decide to consolidate credit card debt so you pay off what you owe in less time and at a reduced interest rate.

While there are a few situations when it pays to have credit cards, generally it’s best to keep a zero balance on any cards you already carry. Avoid using credit cards unless you know you will have the money to pay them off. Also, answer honestly when applying for credit cards.

At Christian Credit Counselors, we help consumers get out of credit card debt in less time. For more tips on using credit cards responsibility and advice on getting out of debt, please contact us.

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