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By Henrietta J. Burroughs                Follow East Palo Alto Today on
East Palo Alto Today                         Facebook    Twitter         Blog              
January 3, 2018                  EPA Today Facebook page Follow epatoday on Twitter EPA Today Blog Icon


Graphic_Pay off debt

Courtesy of https://www.clker.com/


It’s the beginning of 2018! Are you starting this year heavily in debt? Did you splurge on holiday expenses and now have to face the results of overspending? Or, are you facing student loan debt and wondering how to pay it down and pay it off?

"Living beyond your means" isn’t just an empty term. It probably applies to millions of people today who’ve maxed out their credit cards or pushed them almost to the limit.

Well, take heed. There is help available. Many credit counseling services recommend steps one can take to tackle personal debt and get finances in order.

Michael Sullivan, a personal finance consultant with Take Charge America, a national nonprofit credit counseling and debt management agency gives the following six tips:

  • Create a Budget & Plan: Budgets are essential – no matter your debt level. To start, track all of your income and expenses for one month. Use that information to categorize all of your expenses, including debt payments. You’ll likely be surprised to find many areas where you can cut expenses and shift the funds toward paying down debt faster.

  • Get a Second Gig: In today’s “gig economy,” it’s easy to pick up a second gig on your own schedule. Ride services, food delivery and even errand services make it easy and convenient to make an extra buck to put toward debt.

  • Consider a Balance Transfer: It could be advantageous to transfer a balance from a high interest credit card to one with a lower interest rate. However, first see if any fees could offset the benefit, and determine whether you can pay off the balance before any lower promotional rates end.  

  • Negotiate with your Creditors: A lower interest rate could help you pay down your debt faster. You can call your credit card company and ask for a lower rate if you have a positive credit history. Be prepared to state your case. Perhaps you have been a loyal customer, or a competitive creditor is offering lower rates?

  • Talk to a Nonprofit Credit Counselor: If you need help creating a budget and plan to pay off debt, a nonprofit credit counselor can help – for free. Confidential credit counseling sessions can be completed online or over the phone. According to your budget and individual life circumstances, you will be presented with the best options for getting out of debt, and you will gain tools and knowledge to create financial independence.  

  • Reevaluate Your Student Loan Repayment Plan: When was the last time you reviewed your student loan repayment plan? As your life circumstances shift, your plan may too. Maybe you need an income-driven plan, or perhaps it’s better to consolidate multiple loans. A student loan counselor can help you decide what’s ideal.

If you are thinking of using a credit service or agency, do make sure that you do your homework before signing any agreements.  If they say that they can erase your bad credit or your bad credit history, boost your credit score quickly, or fix your credit on your FICO report, beware.

The consumer credit counselors at Clearpoint, another nonprofit consumer credit counseling organization, strong emphasizes, “No one can remove accurate negative information from your credit report.”

The company’s counselors say that you can hire a company to help you, “but anything a credit repair clinic can do legally, you can do for yourself at little or no cost.” An article on the organization’s website gives tips that explain how to understand one’s credit score and how to improve it.

So, if you’re carrying more debt than you’d like, credit counselors stress that there are definitely some steps you can take to reduce it and start the new year on a better financial footing. Wouldn’t it be a commendable goal if we all resolved in 2018 to live within our means?

Reach the author of this article, Henrietta J. Burroughs, by email at epatoday@epatoday.org