July 18, 2016

Debt Counseling

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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