By Bud Wassell, Director, Solutions EAP

Perhaps your credit card debt has grown over the past year or so and you’d like to pay it down, but one thing or another keeps demanding your money, like groceries, heat and electric bills, unexpected car or home repairs. In other words, legitimate expenses that you must pay. And interest rates on those cards are higher than ever, making it hard to make any headway even if you are paying more than the minimum monthly payment. If you’re in this boat, you’re not alone. If you’re having trouble paying the minimum and you’re behind a payment or two, you really must do something, right?

As I mentioned previously, you might be tempted to call one of the many debt relief services that you hear on the radio or see on TV. BE VERY CAREFUL. They promise to settle your debt for pennies on the dollar, but you will probably end up paying them too and in the end still owe much of your original debt. A better option is to go with a non-profit organization – more on this later.

The National Foundation of Credit Counseling says there is nothing a debt-settlement company can do that you can’t do for yourself. Credit card companies would prefer to talk to you directly. According to Julie Jason, a financial columnist, there are several steps you can take:

1. Know your overall credit picture. Who are your creditors, how much do you owe total, what are the interest rates and what are the minimum monthly payments.

2. Know your creditors. Pick up the phone and ask to talk to someone who can assist you with a hardship situation. Explain your circumstances and ask what programs are available. You need to be prepared to stop using the card and willing to keep current. Explain that you don’t want your credit affected negatively. And you’d like to use the card again when you’re in better shape.

3. Before you take any action, learn as much as you can about all the programs offered, such as lowering monthly payments, waived late fees, forgiving part of the debt and the consequences of participating.

4. Now you need to look hard at your budget and do all you can to cut your expenses. Determine what monthly amount you can devote to your credit cards so you can make these payments without fail. Then call back and see what you agree on.

Next week: Consumer Credit Counseling services and other financial resources.

If you would like to talk about this or any other problem or concern, please call Solutions Employee
Assistance Program at 1-800-526-3485 or www.solutions-eap.com

George "Bud" Wassell, M.S., LPC, CEAP
Director, Solutions EAP
213 Court Street
Middletown, CT 06457
800-526-3485
fax: 860-704-6221
http://www.solutions-eap.com