Holidays
Nurse wins battle with debt
By Ron DeKett
TRIBUNE-TIMES WRITER
Tuesday, January 6, 2004
How to get out of debt
* Evaluate your priorities.
* Adopt the 24-hour cool-off rule. If you see an
item you want to buy, wait for 24 hours. If after 24 hours you still have the same
ardor for the item, evaluate with a cool head whether you need it and can afford
it.
* Start to live on cash and stop incurring new credit
card debt.
* Keep your checkbook balanced. When your monthly
statement comes in, review it immediately.
* Choose a bill payer, either you or your spouse.
This cuts down on confusion and mistakes.
* Set debt limits for birthday and Christmas gifts.
Go in with someone else when buying an expensive gift.
* Track your spending and carefully prepare a budget
including fixed and flexible expenses.
* Transfer high interest rate balances to one card
with a low interest rate and stop using the card while paying at least each months
incurred interest plus the minimum due.
* Before transferring to low-interest rate cards,
double-check the fine print and expiration dates for the low rate.
* Cancel the high-interest rate account after transferring
its balance.
* If you are unable to transfer all balances call
a credit counselor for advice and options.
(Source: Consolidated Credit Counseling Services
Inc.; Shannon Wheeler's "Finding Financial Peace.")
How to create a positive
credit record
* Open a savings account and make regular
deposits.
* Open and use a checking account. Always know your
balance and avoid Not Sufficient Funds (NSF) checks.
* Obtain a limited-use credit card such as a department
store card and use it responsibly. Make small purchases and pay the card off every
month when the statement arrives.
* Always pay bills on time. Late payments or collection
accounts will tarnish your credit record.
* Demonstrate stability. Stay at least two years
at the same job; live at least two years at the same address.
* Do not apply for too many lines of credit at one
time. Creditors view an excess of credit applications as a sign of potential risk.
They may deny your request for credit
due to the number of inquiries on your credit
report.
* Close inactive or unneeded lines of credit. Creditors
may view open lines of credit as debts, even if you have no balance owed on those
accounts.
* Get a copy of your credit report from at least
one credit reporting agency each year. Use the report to correct any errors, to
take care of any forgotten debts or to close inactive lines of credit.
* Talk to your financial counselor if you are experiencing
difficulty establishing or re-establishing credit.
(Source: Luthern Social Services Financial Counseling
Service)
How to find a reputable
debt counseling service
* If you're not disciplined enough to
create a workable budget and stick to it, can't work out a repayment plan with your
creditors, or can't keep track of mounting bills, the Federal Trade Commission recommends
you consider contacting a credit counseling organization.
Many credit counseling organizations are nonprofit
and work with you to solve your financial problems. But be aware that, just because
an organization says it's nonprofit, there's no guarantee that its services are
free, affordable or even legitimate. Some credit counseling organizations charge
high fees, which may be hidden, or urge consumers to make voluntary contributions
that can cause more debt.
Most credit counselors offer services through local
offices, the Internet or on the telephone.
If possible, find an organization that offers in-person
counseling. Many universities, military bases, credit unions, housing authorities,
and branches of the U.S. Cooperative Extension Service operate nonprofit credit
counseling programs.
Your financial institution, local consumer protection
agency, and friends and family also may be good sources of information and referrals.
Reputable credit counseling organizations can advise
you on managing your money and debts, help you develop a budget, and offer free
educational materials and workshops.
Their counselors are certified and trained in the
areas of consumer credit, money and debt management, and budgeting.
Counselors discuss your entire financial situation
with you, and help you develop a personalized plan to solve your money problems.
An initial counseling session typically lasts an
hour, with an offer of follow-up sessions.
