Debt relief tips
The savings ratio in the United States has recently fallen to minus 0.5 per cent, meaning Americans not only spent all of their after-tax income but also had to increase their borrowings or plunder their savings. This is the first time the ratio has gone negative for an entire year since 1932 and 1933, when the US was struggling to cope with the Great Depression.
In other words the chances are that you are either already in debt or will need to think about how to get out of debt very soon. So many Americans are borrowing these days that more than $2 trillion in consumer debt is currently outstanding, up 23 percent since 2000 – not including mortgages. Getting into debt with credit cards is easy, but getting out of debt is another story. For anyone who has been coasting along, making minimum monthly payments and taking on more and more debt just to pay the bills, the Consumer Reports Money Adviser has the following debt relief steps:
- Determine how bad it is. Add up the total balances to get a grip on how much debt is outstanding. Take into account the interest rate and what it will cost paying it back over various time periods.
- Put away the plastic. Leave the credit cards at home and assign a percentage of the monthly income to pay down the balance over the long haul.
- Choose advisers wisely. Credit counseling agencies are often touted as the place to go for advice and to set up a debt- management program. However, some disreputable ones have only dug consumers in deeper.
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