It's never a bad time to start to figure out your finances and the steps to take when it comes to debt. Particularly when it comes to credit card debt, it's important to take steps to stay ahead of high interest rates.
The average credit card interest rate is 16.04% according to Creditcards.com. A recent study has shown that about 23% of existing credit cardholders have added to their current debt as a result of the pandemic. For people utilizing credit more and having problems making payments or meeting the minimum payments on credit cards, a high balance and accruing interest make it more difficult to get out of debt.
- Monitor your bills regularly. If your creditor has granted a payment deferment or waived fees, interest could still be accruing. Annual fees could also still apply.
- Monitor your credit report to ensure your credit history is accurate.
- If you must utilize credit, try to use credit cards with low interest. That’s part of using credit cards wisely. Or, request a reduction in your interest rate as a hardship option.
- Don’t ignore the problem! Don’t delay in speaking to your creditors to see what hardship assistance programs are available. Most credit card companies are offering COVID-19 accommodation.
- Review your income and your expenses. Set a simple spending plan.
- Having a fresh set of eyes to review your situation is never a bad idea.
- Talk to a trusted national nonprofit like GreenPath, who can contact your creditors with you, and ensure you understand your options. Counselors can help focus on your total financial situation and make a personalized plan to address the debt moving forward. Having a clear strategy for handling your credit card debt can help you feel more in control of the situation and reduce stress.
- For those facing financial challenges, credit cards are typically only part of the picture. Make sure you're taking healthy financial steps like making a budget!
GreenPath's new Learning Lab+ is a great resource to find well-researched financial courses and helpful tools that can set you on a path toward taking control of your finances. The newly-launched Learning Lab, as well as GreenPath's certified financial counseling services, is available to all HUECU members!