Troubling credit and debt trends are returning

Maybe its time to take a closer look at your own debt and the potential impact of an economic slowdown on your finances. With the average credit card interest rate well over 15 percent, and many approaching 30 percent, the most sensible thing is to attack those balances now, while you have some choice in the matter.

Here are two ways to approach the problem of paying down card balances.

–Pay it off in three years. There is a simple mathematical formula that always works, no matter what the size of your card balance or interest rate. Just take the current monthly payment and double it. Make note of that amount, and keep paying that same amount every month. Dont charge another penny on the card. Your card will be paid off in three years!

–Buy time with a balance transfer. Transferring your current balance to a new card can give you time to get your debt management program started. But beware of fees and conditions. According to CreditCards.com (a division of Bankrate.com), of the 89 cards that offer a balance transfer, 77 of them charge a significant fee, averaging 3 percent of the transfer. Also, the no-interest grace period may differ, as will the rate charged on your balance when that period expires. Average rate at the end of the transfer period is 17.83 percent.

According to CreditCards.com, the very best deal out there is the Chase Slate card, which doesnt charge a fee if the transfer is made within 60 days of opening the account. And you dont pay interest on the Chase Slate transfer for 15 months.

There are some other alternatives if youre buried in credit card debt. Instead of hiding from the card issuer, ask for a late fee waiver or even a waiver of the annual fee. CreditCards.com says 89 percent of cardholders who asked for a late fee waiver had their requests granted, and 78 percent of those who asked for a lower interest rate were accommodated. (That trick works better if they know youre not desperate — something card issuers can see at a glance on your credit report!)

And if youre really stuck, contact the National Foundation for Credit Counseling at 800-388-2227, which will connect you to the nearest local office of this trusted organization.

The first step is to make a list of all your debts. Then get started on a plan, because debt is a problem that only grows worse over time. And thats The Savage Truth.

(Terry Savage is a registered investment adviser and the author of four best-selling books, including The Savage Truth on Money. Terry responds to questions on her blog at TerrySavage.com.)

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