Controlling Your Debt

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Do you always have to use a credit card to make a purchase? Do you find yourself only able to make the minimum payment on the card? Have you gone from using one credit card to two, three, or more? These are some of the standard warning signs of debt. If you recognize any of them in your own financial picture, take action to get your debt under control. Consider the following:

  • Understand your credit report
    Order a copy of your credit report once a year to make sure that everything on it is accurate. You can get a free copy if you were recently denied credit and can purchase one for a small fee anytime. Contact one of the three major credit bureaus: Experian (888-397-3742),Trans-Union (800-888-4213), or Equifax (800-685-1111), and see our related credit products and services for more information about ordering your credit report.
  • Figure out where you stand
    Before you make a plan to get out of debt, get a sense of where you stand financially. Look over your outstanding debt — credit cards, car payments, mortgage, and student loans — to help you determine what your true needs are and what obligations have become hardest to manage.
  • Consider consolidating your debt
    Rolling all of your debt into a single loan may reduce your current monthly payments, and make tracking and payments easier. Homeowners have an additional option — by consolidating debt through refinancing or home equity financing, they may be able to save even more through tax-deductible interest. Consult your tax advisor regarding the deductibility of interest.
  • Create a budget
    Look at fixed as well as variable expenses. Do you really need a $50 haircut? Watch out for impulse purchases. Consider a relaxing vacation camping instead of a European tour.
  • Start saving now
    Even if you're focused on paying off debt, you shouldn't put off saving for your future. Take advantage of a 401(k) or other retirement plan your company may offer, or use an IRA if you are self-employed. Consult your financial advisor for details.
  • If you feel you are in over your head…
    See a credit counselor if you can't see a way out on your own. Consumer Credit Counseling Services (800-208-2227) is one national non-profit that can help you explore your options and make a plan to get you out of debt.