10 tips to manage debt problems
Last Wednesday, December 12, I was in
One of the selling points of CIBI-PHCCI Info Alliance is our capability to share timely and relevant information particularly on credit discipline and credit scoring. Well today, I would like to share with them and to their coop members some valuable tips on how to stay “out-of debt” or just simply “manage debt problems.”
The following are “Tips in Maintaining Good Credit Risk Score/ Credit Discipline from Iris Taylor and Shana Moore, Certified Credit Counselors which I know could be very much applicable to all of us:
First, understand why your credit risk score is important.
Aim for “maintaining good credit rating”.
Second, everything begins from small things. Start with paying bills on time. If possible, get into the habit of making payments as soon as the bill comes in. Don’t wait for the due date.
Third, sit down with the family and write financial goals together. That way, everybody, including the kids/ siblings, gets on board. It’s discouraging if one person is resolved to pay down debt while everybody else constantly clamors to dine out, watch movies or buy toys.
Fourth, focus on paying high interest accounts. Your high-interest accounts go down slower.
Fifth, stop using the cash-advance feature of your credit card. The interest rate is always higher, and you wind up paying a lot more interest and taking longer to repay your debt.
Sixth, stop thinking of your credit card as a cash cow. It’s not. It’s a loan; you’re borrowing money.
Seventh, always remember that, if you mess up with one creditor, you mess up with all.
Eight, call your creditor if you’re in over your head. “If there is no way to make even the minimum payments to your creditors after reducing expenses, call your creditors and work out long-term repayment plans with them.
Ninth, get a reputable debt-management firm to plan your repayment/ payment of your bills for you. “For many consumers, that’s the only alternative, because they don’t have the personal financial discipline or savvy or knowledge to do it on their own.
Tenth, and most importantly, stop giving away your money. Pay cash whenever possible so you don’t waste money paying interest. If you can’t pay cash, shop with your lowest interest-rate card. Pay off outstanding balances to avoid finance charges, penalty and interests.
Remember, it pays to pay your self first. The key is to stay out of debt and maintain a debt-free living.
(Mr. Ed F. Limtingco can be reached at 0917-7220521 or at mailto:[email protected])
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