Released January 08, 2009
MANHATTAN, Kan. – Working to retire debt can put more money in your pocket to help build an emergency fund, add to savings and retirement accounts, and pay for occasional extras such as a vacation or home improvement, a Kansas State University specialist said.
With the average U.S. household now carrying $8,000 – or more – in credit card debt, making even the minimum payment each month can leave over-extended card holders feeling strapped and short on cash to cover necessities, said Carol Young, K-State Research and Extension financial management specialist.
Her tips to reduce – and eliminate – credit card debt include:
- Put the credit card(s) away at home. If carrying a credit card, you’ll be tempted to use it.
- Review current debt, balance due, the interest rate on each account, and minimum monthly payment.
- Contact the card company and try to negotiate a lower interest rate to make monthly payments cover more of the amount due. Or, if carrying more debt on multiple cards (or from multiple sources) than you can handle, consult a reputable debt management specialist to determine a payment plan designed for you to pay off the loan. (In Kansas, check http://www.debtadvice.org/takethefirststep/locator.cfm to find the locations of nearby organizations that are members of the National Foundation for Credit Counseling.)
Paying with a credit card can be convenient, but charging more that can be reasonably paid off at the end of the month often is troublesome, Young said.
While some who have previously over-extended themselves when using credit cards find it easier to manage post-credit card spending with a debit card, others will want to hang on to one or two credit cards for travel or ordering online.
“Think before spending and weigh needs versus wants,” Young said. More financial management tips are available at county and district K-State Research and Extension offices and on Extension Web sites: http://www.oznet.ksu.edu and http://www.oznet.ksu.edu/financialmangement/.
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http://www.oznet.ksu.edu/News/story/briefs010809.aspx
Contact: Elaine Edwards, elainee@ksu.edu
