Debt Management 101: Strategies for Overcoming Financial Obstacles

Customer creating a debt management plan

With the COVID-19 pandemic’s recent surge and coronavirus-related unemployment levels remaining high, many people are finding it increasingly difficult to keep on top of expenses and debts.

If you are someone who has felt the economic impact of the pandemic and have seen your outstanding debt rise as a result, following are just a few things you can do to create a debt management plan and keep it from negatively impacting your credit score.

 

Tips for Debt Management

  • Take a close look at all of your expenses and see if there are any routine costs you can eliminate. While a daily coffee at Starbucks or a high-end cable package may be enticing, eliminating such costs can translate to a significant savings over the course of a year.
  • Though many COVID-19-related debt relief programs have already expired, it is still worth a call to your credit card issuer to see if there is any way they will work with you, such as with a flexible payment plan.
  • Focus on paying down your credit cards with the highest interest rates first.
  • If your credit score has not been negatively impacted, it is worth checking to see if you are eligible for a lower interest rate on your credit cards–something most card issuers will not offer unless you ask.
  • Check out if you are eligible for a 0% or low-interest rate offer for a new credit card that you can transfer debt to from a high-interest rate card. Again, this is likely only possible if you have a good credit score. And if you do qualify, be sure to read all the terms and conditions, as breaching them could actually leave you with higher fees or rates than you began with before transferring your debt.
  • If you are a homeowner who has amassed substantial equity in your home, you may want to consider taking out a home equity loan to manage your credit card debt, especially with current interest rates continuing to be at or near historically low levels.
  • Alpine Bank offers a variety of home equity loans, as well as wealth management services for helping you plan around your debt and set up your financial future.

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