Get Out of Debt: Top Tips from Your New Bedford Credit Union

get-out-of-debtStudies show that consumer debt in the United States is at an all-time high. It can be difficult for people to recognize or even admit that they have a debt problem. Once you do realize that you are in debt, it can be extremely overwhelming to think about how to get back out of it and pay back what you owe. However, regardless of your situation, the important thing is to act immediately and not put it off. Taking control over your finances and figuring out a plan that will help you to take care of your debt and reduce the amount of stress that you are under as a result is what will help you to create a better future for you and your family.

How to Tell if You Are in Debt
Because it can be difficult for many people to identify whether or not they are in debt, the first thing you should do is to ask yourself a couple of questions that will help you to figure it out for yourself. Here is a short list of situations that are typical of a person that is in debt. If you identify with any of these, you may want to look deeper into your financial situation, go over your credit union checking account and see what you can do to make improvements.

  • Do you pay late fees to credit cards and other bills on a regular basis?
  • Do you put off balancing your checkbook or reconciling your account online?
  • Have you bounced any checks in the last year?
  • Do next month’s bills come in the mail before you have paid last month’s bills?
  • Do you stack up bills in a pile and avoid opening them until later?

Declare Your Debt in Writing
The next step is to write out how much debt that you have. Do you have a mortgage with your New Bedford credit union? How much do you still owe on your home? Do you have a car loan or a home equity line of credit? Write down the balances for each of these debts, as well as credit card companies, store credits and other types of loans. Make a list that includes the name of the lender, the amount of money that you owe, the term of the loan (when it will be paid in full), any late fees that you have paid in the past year and the interest rate or any other associated lending fees.

Sometimes all it takes is to make an honest list of all your bills and debts to see more clearly your true financial situation. While it can be stressful to look at all of that debt that is hanging over your head, it can be a very positive and important step toward getting yourself out of debt. Credit cards and other store credit accounts can often make us feel as though we are better off financially than we really are. Taking an honest look at the amount of money you have in your New Bedford credit union accounts and compare it to the amount of money that you owe for your debts can be a very eye-opening experience.

How Your New Bedford Credit Union Can Help
There are many tools available through St Anne Credit Union in New Bedford that you can use to help improve your financial situation. Taking advantage of the assets that you do have with a home equity line of credit that can be used to pay off high-interest debt with a more manageable payment plan is just one of those ways. Better managing your credit union checking account is another. Making sure that you pay your bills on time and that you pay more than the monthly minimum is another way to improve your credit and help you get out of debt on a schedule that you can afford.

Setting aside money for emergencies instead of relying on credit cards and other types of credit resources can also help. A money market account or certificate of deposit can be a great way to grow your money and help you be prepared for life’s events. Part of any good “get out of debt” plan should include learning how to save money and put it away for a rainy day. Learning how to pay for things with cash instead of with store credit or credit cards is another. Saving up for that brand new television or even a new car can help you reduce the amount of money you spend each month in interest and reduce the amount of overhead debt that you have.

How $50 Can Make a Change
Depending on your situation, $50 can either be a lot of money or something that you spend without thinking. Either way, $50 can help to make a big change in your financial situation if you apply it carefully to your debt. For example, a credit card that has an 18 percent annual interest rate that has a $3,000 balance and a minimum monthly payment of $60 will take 8 years to pay down to zero. At that interest rate, you will have also paid $5,780 in interest above and beyond your $3,000 debt.

But if you would pay just an extra $50 each month in addition to the $60 minimum, for a total of $110, you can pay the entire debt off in just 3 years and save over $1800 in interest fees. That is the proven power of $50 being applied to your debt and what it can do to help you get out of debt, save money and have more money to put aside in a money market account or another type of savings at your New Bedford credit union. This works with credit cards, car loans, home loans or any other type of debt.

How to Get Started
Visit your local New Bedford credit union to find out more about all of the financial tools available that can be used to help you get out of debt and set up a savings account that you can use for emergencies, big expenditures and other goals in the future. The agents at St Anne Credit Union can help you get set up with a Share savings account, a credit union checking account and help you work toward investing in a money market account or other interest-earning investment that you can use to help grow your money for the future. Give us a call or stop by our New Bedford location to speak with one of our agents.