American Consumer Credit Counseling offers guidance on handling credit card debt and sidestepping big interest charges.
Boston, MA – October 5, 2022
The Federal Reserve continues to raise interest rates and will likely not stop until the cloud of recession begins to lift. The latest increase put the federal funds rate at 3.25 percent, with the Fed indicating it may reach 4.25 or 4.5 percent by the end of 2022.
American Consumer Credit Counseling, Inc (ACCC) is encouraging clients to take immediate action as interest fees will make credit card debt more difficult to pay down for those already struggling with debt. Creating a plan to reduce debt will result in lower monthly fees and ideally a debt free future.
“Americans must create a contingency plan to handle not only increasing interest rates but also high prices on basic necessities,” said Allen Amadin, President and CEO of American Consumer Credit Counseling. “Many will need support and guidance from budgeting and debt management professionals as interest rates cut deeper into their household budgets.”
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 (FHI) 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, this number is expected to increase in the upcoming FHI.
ACCC employs a team of budget counselors and financial planning experts to help clients get rid of credit card debt, create sustainable household budgets, and position themselves to begin saving and building cash reserves. The non-profit counseling agency and debt management provider always gives these fundamental pieces of advice:
- 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.
- Use cash when possible: Small charges on one’s credit card add up when the end of the month comes. Instead of using credit and ending up paying more on interest fees, when possible, use cash or a debit card.
- 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