Break The Cycle Of Piling Up Debt

Deirdre Jannerelli
September 21, 2018

To say Americans spend beyond their means would be an understatement. A 2017 study of American household credit card debt by the website* revealed that the average household with credit card debt had balances totaling $15,482. And households that carried debt averaged $904 in annual interest, according to the findings.

Getting a handle on your debt isn’t always easy to do, but you don’t have to tackle it alone, especially if you find that you can’t stop digging a deeper financial hole. There are debt relief agencies out there who can help.

But you need to do your homework before choosing one. If an agency offers a deal that sounds too good to be true – such as clearing all your debt for a fairly significant fee – steer clear of it. Experts point out that reputable financial counseling agencies typically are nonprofit organizations, and offer either free services or only charge a nominal fee to create and oversee a debt management plan for you.

One resource that can provide guidance in this area is the National Foundation for Credit Counseling® (NFCC®). Founded in 1951, NFCC describes itself as the nation’s largest and longest-serving nonprofit financial counseling organization.

NFCC’s website ( offers an extensive amount of information, such as debt counseling tips and instructions on finding a financial counseling agency in your area.

Counseling agencies will usually work with your lenders to reduce the interest rates you’re paying on credit card debt, and will consolidate your payments so that you’re only making a single payment to them every month. They then disperse the funds to your various lenders.

If you’re comfortable coming up with a debt management plan on your own, experts agree on a few things to get you headed in the right direction. For one, you need to figure out your total amount of debt as well as your monthly income.

Once you have these numbers in hand, it’s time to create a budget, one that’s realistic and will get the debt-reducing results you’re seeking. It’s good to be as specific as possible, to the point that you’re tracking how much you’re spending at the coffee shop each week.

Once you’ve got a good handle on how much money is coming in and how much is going out each month, it’s time to implement a budget and stick to it. This is going to require discipline and the need to give up some things in order to stay within your budget.

Another trick is to use cash instead of credit cards to make purchases. This makes you more aware of what things really cost because you’re actually handing over “real” money instead of relying on plastic. According to researchers, people are more likely to make impulse purchases when using credit cards because they feel like the money they’re spending isn’t really theirs.

A credit card balance transfer is another approach to consider for lowering credit card interest rates. Many credit card companies offer promotions of 0% interest for a year or more if you transfer your debt from an old card and pay a small fee.

You can also ask the issuer of your current card for a reduction in your annual interest rate. This has proven to be successful for many people, especially when they tell the lender that they’re looking into balance transfers.


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