American Consumer Credit Counseling offers guidance to consumers on how to handle credit card debt to avoid high interest fees
Boston, MA – August 11, 2022
As the Federal Reserve continues its efforts to mitigate inflation by raising interest rates, credit card rates won’t be staying behind. Those with credit card debt will see an increase of 0.75 percent on interest rates.
American Consumer Credit Counseling (ACCC) advises clients to take strategic action now and be prepared to reduce their credit card debt as much as possible. Lowering your debt will mean paying less in interest, benefiting consumers long-term in light of the Federal Reserve’s announcement on their goal to ultimately raise interest rates to 2.5 percent.
“Many have to rely on credit cards to pay for basic necessities, especially with inflation pushing prices so high,” said Allen Amadin, President and CEO of American Consumer Credit Counseling. “Reducing credit card debt is always crucial to financial health. However, now more than ever it is critical for Americans to survive day-to-day costs of living and still be able to put money aside for savings.”
The latest analysis of household financial health and readiness by ACCC indicates that nearly 40 percent of consumers polled cannot put any money at all into savings. The Q1 Financial Health Index found that 39 percent of respondents were impacted in some way by the rising cost of basic necessities on their family’s lifestyle. In June, the percentage of respondents impacted rose to 48 percent.
ACCC works every day helping clients get rid of credit card debt. Here are some steps Americans can take to reduce credit card debt and ultimately eliminate it:
- Create a budget: Using a worksheet or online tool can help to evaluate how consumers spend their money and how to efficiently disperse their funds. ACCC has several worksheets to create the right budget for each person.
- Cut spending: When trying to reduce debt, make sure to temporarily remove all unnecessary expenses, such as streaming subscriptions, eating out or unaffordable luxuries. Cutting back on expenses will help to pay off more debt, stick to the budget, and stop borrowing more from credit cards.
- Pay on time and more than the minimum: Paying your credit cards on time will ensure you avoid late fees and penalties. Regardless of paying on time and the minimum required, consumers will still have to pay the percentage of interest fees on the rest of the balance. Therefore, paying more than the minimum will reduce the amount of the fees you have to pay per month.
Sticking to a budget and minimizing expenses can be difficult. However, it can be the best path to be on a strong financial foundation and get ready to face higher interest rates across all facets of the economy.
About American Consumer Credit Counseling
American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management through credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling, and financial education concerning debt solutions. To help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loan assistance, youth and money, homeownership, identity theft, senior living, and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free financial education resources, log on to ConsumerCredit.com or visit http://www.consumercredit.com/financial-education.aspx