LAS VEGAS (KTNV) — According to a new survey, many Americans say their debt is unmanageable. Credit cards are one of the main reasons so many people are in debt. To help you keep your head above water, 13 Action News presenter Tricia Kean spoke with an expert on how to tackle this debt.
“I got quite a bit,” said Cherie Cornelius of Centennial Hills.
Since she was 18, she has had a collection of credit cards. She admits she got into serious debt.
“I’ve learned over the years that they’re not meant to slide around everywhere,” Cornelius said.
DROWNING IN DEBT
Cornelius says she learned her lesson after years of only making the minimum payment. But many Americans are still drowning in debt.
A survey by OppLoans says half of Americans are in debt. 52% of them say their debt is not manageable.
We went to an expert at the non-profit organization, Money Management International, or MMI, for a debt repayment game plan.
Number one: know how much you earn and spend each month.
“Most of the clients we work with have never created a family budget,” said Thomas Nitzsche of MMI. “They may not know what their credit score is. They may not have pulled out their credit report in years. So taking control is really important.”
Number two: Call your lenders and see if they can lower your interest rates.
“It’s a good idea to contact all of these creditors and see if they’re willing to adjust these rates. If you’re struggling financially, be sure to present your case to see if you can get these rates lowered. interest,” Nitzsche said.
Number three: Try to pay off the lowest balance first. Once it is paid, you can invest additional money in paying off the next lowest balance.
“Unfortunately, here in Las Vegas, a lot of people, when they’re in debt, sometimes use these payday loan places,” Nitzche said. “Payday loans are so difficult. You know, a study they did with Pew Charitable Trusts a few years ago found that the average person doesn’t just take out one. They actually take out multiple over and over again. This payday loan cycle is really damaging because the interest rate is so high.”
the Pew Charitable Trusts report found that the average borrower takes out eight $375 loans per year and spends $520 in interest.
“So it’s very important to avoid them, if possible,” Nitzsche said.
With a plan, some financial discipline, and time, you can get out of debt. But if you decide you need a professional, be wary of who you turn to for help.
“If the company guarantees that they can improve your credit, especially in a short period of time, that’s a red flag. If a company says they can settle your debt for pennies on the dollar, that’s another red flag,” Nitzsche said.
As for Cornelius, she says she’s come a long way to find out for herself.
“I learned to repay as much as possible, so I was able to repay quite a few,” Cornelius said. “I’m working on getting a zero balance on everything.”