February 5, 2015

Credit Counseling

Instead of backsliding into debt again, there are strategies you can use to stay out of debt once you complete a Debt Management Program. Debt consolidation is a smart way to get out of debt, but it doesn’t stop you from taking on new debt. By receiving credit counseling, you will learn the strategies and tools you need to avoid backsliding into debt. Before you get into financial maintenance mode, you need to tackle your medical and credit card debt as well as unsecured loan debt. By working with trained credit counselors at Christian Credit Counselors, you reduce your interest rate. Instead of having a double-digit interest rate, the team at Christian Credit Counselors can reduce it to something more attractive such as 6 or 7 percent. With a lower interest rate, you reduce the number of years it takes to pay off debt and the monthly payment.

Use The Snowball Method

One great strategy to continue to use after you complete a Debt Management Program to pay off all your debt is the snowball method of debt repayment. Work at paying off the bills that have the smallest balance first so you feel motivated to move to the next bill. For example, if you have a $500 bill from a doctor and an $800 car bill, work on paying off the doctor’s bill first while paying the minimum you owe on the car. Once you pay off the doctor’s bill, use that same amount of cash to work at paying off the car bill.

Pay With Cash Whenever Possible:

Experts say people tend to make impulsive purchases when they use a credit card instead of cash. Give yourself a budget when you go to the grocery store or movies. Leave your credit card at home. You will force yourself to stay on a budget. Also, experts say it’s more painful to part with cash. Swiping a credit card seems more like a game.

Sleep On a Major Purchase:

To stay out of debt, don’t make any major purchases without giving yourself 24 hours to think about it. You can decide what qualifies as a major purchase, but some people consider anything more than $100 a big-ticket purchase item. If you realize you don’t really need the item, consider investing the money instead.

Work With a Budget:

When you receive credit counseling, you learn how to create a realistic budget. You will organize your expenses into different categories. In addition to the expenses you have coming up, you’ll also think about future expenses. By keeping a daily, monthly and yearly budget, you’ll reduce the risk being dependent on loans or credit. In addition to budgeting for spending, calculate how much you will set aside in savings.

At Christian Credit Counselors, our team of trained and certified credit counselors can help you get out of debt 80 percent faster. We work with more than 400 creditors to negotiate a Debt Management Program that will benefit you. Education is the cornerstone of our success.

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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