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  • Credit Card Makeover: Getting Out of Debt

  • Paying only the minimum due

    Charging more than you pay monthly

    Charging what you used to buy with cash

    Balance not decreasing

    Approaching your credit limit and applying for more credit

    Warning Signs of Credit Trouble

  • Needing a loan to pay debt

    Not knowing how much you owe

    Feeling stress when you use your credit cards

    Draining savings to pay bills

    Making payments late

    Warning Signs of Credit Trouble (continued)

  • Reliance on credit usually caused by spending more than earning

    What are your current income and expenses? - Be conservative estimating fluctuating income

    - Tracking expenses can help you come up with accurate figures

    - Dont forget about savings


    Create a Budget

  • List all debt

    Subtract expenses and debt

    payments from income

    If spending more than earning,

    need to make changes

    Create a Budget (cont.)

  • Increase income - Overtime - 2nd job - Better-paying job - Non-working members of household get job - Sell assets (one-time solution)

    Decrease spending - Can anything be reduced, substituted, postponed, or eliminated? - Be honest about what is a necessity and what is not

    Create a Budget (cont.)

  • Leave cards at home

    Avoid shopping as a social activity

    Ask yourself if purchase is essential and wait if not

    Budget for small rewards

    If all else fails, cancel credit cards

    Controlling Spending Urges

  • Pay extra - Start with account with lowest balance or highest interest rate

    Reduce interest rates

    - Ask creditors

    - Balance transfer

    - Consolidation loan

    - Home equity line/loan or refinance

    - Debt Management Plan

    Delete Your Debt

  • Improving Your Credit Standing

    Credit report tracks credit activity

    - Compiled by Equifax, Experian, and TransUnion

    Your credit score is a numeric summary of the information in your credit report and designed to predict likelihood that you will repay what you borrow

    FICO score most common

    - Ranges from 300-850, the higher, the better

  • How FICO Score Is Calculated






    Types of Credit Used

    Payment History

    Amounts Owed

    Length of Credit History

    New Credit

  • Improving Your Credit Standing

    Always pay on time

    Reduce debt load

    Check credit report for errors

    Keep old accounts

    Limit balance transfers

    Avoid excess credit applications

    Be patient

  • BALANCE is a financial education and counseling service. Services include money management counseling, debt repayment options, credit report review, and more.

    Call toll-free 888.456.2227 or visit




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