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Have you set sail into the Sea of Credit Card Debt?

Have you set sail into the Sea of Credit Card Debt?. TSCPA Member, CPA Company/Firm Name. The Sea of Credit Card Debt. Loss of job Extended illness No personal budget Straying from spending plan 10 steps to get out of debt AND stay out. 1. Add it up!. One or two credit cards

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Have you set sail into the Sea of Credit Card Debt?

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  1. Have you set sail into the Sea of Credit Card Debt? TSCPA Member, CPA Company/Firm Name

  2. The Sea of Credit Card Debt • Loss of job • Extended illness • No personal budget • Straying from spending plan • 10 steps to get out of debt AND stay out

  3. 1. Add it up! • One or two credit cards • Limit non-mortgage credit payments to 15 percent of take-home pay • Make a list • Who do you owe? • How much? • Interest rate? • Minimum payment?

  4. 2. Start with highest balance. • Target balances with highest APR • Can also pay off low-balance cards first • Once a card is paid off, apply that money to other card balances

  5. 3. Pay more than the minimum. • 47 percent of Americans pay only the minimum each month • Traps you into paying interest for years • Curb your spending • No extra amount is too small

  6. 4. Restructure your debt. • Transfer balance to card with lower rate • Read your credit card agreements • Can change with just 15 days’ notice • Grace period? • Late payment fees? • Balance transfer fee? • Pay your bills on time

  7. 5. Home equity, savings, 401(k)s. • Home equity loan or line of credit • Consider using ONLY if you’re sure you can make payments • Take money out of savings • Borrow from 401(k) • File bankruptcy as last resort • New law makes it more difficult

  8. 6. Get rid of the cards. • Keep two national credit cards • Close other accounts • Use debit card instead • Automatically deducts purchase price from checking account • Must ask “do I have the money?” before buying • No bill at end of month • No interest charges

  9. 7. Protect credit history. • Pay loans and credit card payments on time. • Check credit report periodically • Free copy from www.AnnualCreditReport.com • Review credit report for errors • Avoid credit repair scams – no quick fix!

  10. 8. Set a budget. • Track your spending. • How much are you spending on rent, food, transportation, etc.? • Look for ways to cut back. • Freeze your credit cards, literally. • Think before you buy!

  11. 9. Ask for help. • Consult with a CPA. • Contact nonprofit consumer credit counseling service. • Consumer Credit Counseling Service • 1-800-388-2227

  12. 10. Start saving. • Pay yourself first. • 3-6 months of living expenses • Help you avoid using credit cards for unanticipated expenses. • Next, save toward financial goals. • Retirement, education, etc. • What you don’t see, you don’t spend.

  13. More information • www.ValueYourMoney.org – Texas Society of CPAs’ free consumer Web site • Articles on variety of topics • Monthly consumer e-newsletter • Personal finance tools • www.360FinancialLiteracy.org – American Institute of CPAs’ free consumer Web site

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