Sara Parker, from Utah Central Credit Union, shares some ideas on what to watch for and how to get out of debt the safe way.
The average American has $16,635 in debt, excluding mortages. (Source: U.S. News and World Report, “The End of Credit Card Consumerism,” August 2008). And while debt can be a source of emotional stress and constant worry, there are many prudent strategies that can reduce debt and restore fiscal stability.
Determine how much debt you currently carry and start to whittle it down by doing the following:
1. Transfer high interest cards to lower interest cards, but check first to see if there is a balance transfer fee -which can be as high as 3%. (Some online resources include www.lowcards.com, www.bankcard.com or www.creditcards.com.
2. Determine how much you can afford to allocate toward debt reduction and pay the greatest amount on the card with the highest interest first. Make at least minimum payments on the other cards. Once the debt on the card with the highest interest is retired, apply that monthly payment to the next card plus the minimum and maintain this strategy until the debt is retired.
3. Reassess your spending habits and identify $50-$100 that you could save every month and apply that toward debt reduction.
4. Stop impulse buying now. If it’s not in your budget don’t buy it.
5. Get help from a money management counselor at your credit union, bank or an organization affiliated with your financial institution. We do not recommend working with a credit counseling agency, especially those associated with the National Foundation for Credit Counseling, since NFCC affiliates are essential agents of creditors. Even if successful, debts paid through a counseling agency will appear as black marks on your credit report for seven years.
For additional online resources, Utah Central is providing the following brochures and resources FREE to help everyone looking for smart tips about reducing debt.
Click this link for a timely brochure on money management:
www.greenpath.com/pdfs/brochure_money.pdf.
Smart tips about reducing your debt:
http://www.greenpath.com/Information%20Library/Manage%20Your%20Money%20Now/Reducing%20Your%20Debts.pdf
How much credit you can afford?
www.greenpath.com/Information%20Library/Credit/How%20Much%20Credit%20Can%20You%20Afford.pdf
For more information, you can contact Utah Central Credit Union to find out how to safely get out of debt. They have low interest rate credit cards and other options to help get you financially fit. Visit your local branch, or go to https://www.utahcentral.com/financialFitness
to contact them.
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