Credit Counseling, City Living, and Debt

Jeanne McTaggartCredit Counseling

Credit Counseling

Whether you live in a city where people have the most credit card debt or are struggling with personal debt in a city where people live below their means, you can benefit from credit counseling. A recent report by The Washington Post named the cities where people carry the most credit card debt. If you live in a city where the cost of living is high, you could consider moving to a less expensive city. However, if you want to stay put, there are other ways to get the help you need without relocating.

Managing your debt

According to washingtonpost.com, most credit counselors say your monthly credit card bills should make up 15 to 20 percent of your income or less. If you owe more than 20 percent of your income just to pay the minimum balance on credit card bills, consider credit counseling. A certified and trained credit counselor will help you enroll in a debt management program so you consolidate debt and lower your monthly payment to something more manageable. On top of that, you end up paying less in interest payments when a credit counselor talks to your creditors about lowering the interest rate.

Living below your means

Again, if you can’t live below your means in a more expensive city, consider moving a half hour to an hour out of the city and commuting. If you can telecommute, it could add up to significant savings. According to the report by creditcards.com cited by The Washington Post, people in Washington, D.C. had the highest credit card balance of about $5,000. However, the study also took into account how much money people make in various cities. For someone living in San Antonio, it could take 16 months to pay off a credit card balance assuming a 13 percent interest rate and monthly payments equivalent to 15 percent of your salary. Other cities named as having people with high credit card debt included Miami, Atlanta, Dallas, San Bernadino, Portland, Los Angeles, Tampa, Phoenix, San Diego, Houston, Sacramento, Pittsburg, Detroit, St. Louis, Chicago, Denver, Minneapolis, New York, Baltimore, Philadelphia, Seattle, Boston and San Francisco.

Learning to budget

By receiving credit counseling, you don’t just get started with a debt management plan. You also take the time to budget. Most people have thought about budgeting, but rarely take the time to organize all of their bills, prioritize, plan and crunch the numbers for an actual budget that is realistic. A credit counselor works with you on your budget so you have someone to bounce off ideas and concerns.

Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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