Cost Of Borrowing Increasing: Credit Counseling Service Offers Ways To Pay Off Cards
The Federal Reserve has increased interest rates twice already in 2017 and is expected to raise them two more times this year. With the cost of borrowing going up, experts say it’s time to start thinking about paying off those credit cards.
Lutheran Social Services Certified Credit and Housing Counselor Jesse Hall said, “People cut them up and get rid of them and destroy ’em and every now and then we have people come in to see us and they’ll throw them all on the table and say ‘you take these, I don’t want them anymore’.”
Hall has been providing consumer credit counseling to people for six years. The people who typically come to him for help have eight to ten credit cards and are around $20,000 to $30,000 in debt.
Hall said, “It’s all relative you know, for some, having $3,000 in credit card debt is unmanageable, it puts a big strain on them. For others, you know, we see $100,000 in credit card debt and they’ve been able to manage it.”
For those who carry a balance, interest rates can make purchases cost a lot more. Hall says there are several strategies to making a dent in debt.
“The best way to reduce the amount of interest that you’re going to pay is to prioritize the payments based on the interest rates and attack the highest interest one first,” Hall said.
Another one is paying more on the credit card with the smallest balance first.
“You get a little bit more of that gratification of seeing not just the balances going away, but actually crossing off one of those accounts on your list and that can help people keep going as they attack their debt,” said Hall.
LSS says they help people come up with a budget and explore options that best fit their situations. It’s best to come to them sooner than later.
Hall said, “If you’re feeling any kind of stress at all about, about your debt level or maybe it’s not debt it’s just wondering about your ability to keep up with your month to month payments that’s really the best time to come in and speak with one of our counselors.”
The Center for Financial Resources at LSS offers the counseling for a small fee or sometimes free.