New York Daily News

Strate­gies to tackle debt

- BY DANIEL BORTZ Daniel Bortz is a con­tribut­ing writer at Ki­plinger’s Per­sonal Fi­nance Mag­a­zine. For more on this and sim­i­lar money top­ics, visit Ki­ Business · Credit Cards · Money Tips · Personal Finance · Lifehacks · Infectious Diseases · Banking · Health Conditions · Credits · LendingTree · National Foundation for Credit Counseling · Money Management International

The coron­avirus cri­sis has re­vealed a debt di­vide among Amer­i­cans. The ma­jor­ity of peo­ple have man­aged to stay on top of their credit card bills, an Oc­to­ber Lend­ingTree study found.

On the other side of the di­vide, “some peo­ple are re­ally strug­gling be­cause they’ve been laid off or have had their hours cut,” said Bruce McClary, a spokesman for the Na­tional Foun­da­tion for Credit Coun­sel­ing. Many of those peo­ple don’t have a fi­nan­cial safety net, he said, “so they’ve had to fall back on credit cards.”

If you’re be­hind on bills, here are strate­gies to pay down debt.

Talk to your cred­i­tor. Many credit card com­pa­nies of­fered re­lief pro­grams to cus­tomers when the pan­demic started. Some pro­grams have since ex­pired, but some still ex­ist, McClary said.

If your credit card com­pany no longer ad­ver­tises COVID-re­lated as­sis­tance, McClary rec­om­mends con­tact­ing it any­way. “It’s a known fact that cred­i­tors of­fer re­lief pro­grams off the menu,” he said. “You’ll have to show that you’re fac­ing a hard­ship, but com­pa­nies may be able to pro­vide some kind of so­lu­tion for you, at least in the short term.”

If you are on a de­fer­ment plan with your card com­pany, check in each billing cy­cle, said Michelle Jones of Money Man­age­ment In­ter­na­tional, a non­profit credit coun­selor. “Some credit card com­pa­nies are mak­ing de­ci­sions ev­ery 30 days on whether to ex­tend de­fer­ments,” she said.

Re­quest a lower in­ter­est rate. If your credit score has im­proved, you may be able to ne­go­ti­ate a lower rate on your cards. “They’re un­likely to give you a huge de­crease in your APR, but ev­ery lit­tle bit counts,” said Ted Ross­man, a credit in­dus­try an­a­lyst at Cred­it­Cards. com.

Trans­fer your bal­ance to a new card. Save money by trans­fer­ring the bal­ance on a high-in­ter­est credit card to one with a low or 0% in­tro­duc­tory rate. Look for a card that has a low bal­ance-trans­fer fee. Be aware that not ev­ery­one qual­i­fies, and if you don’t pay down the bal­ance while you’re get­ting the rate break, you could end up back where you started. “Bal­ance trans­fers have got­ten a lot harder to ob­tain dur­ing the pan­demic,” Ross­man said. “Right now, you typ­i­cally need a 735 credit score to qual­ify for a bal­ance trans­fer card. Last year, it was about 710.”

Pay off high-in­ter­est credit cards first. If you’re car­ry­ing debt on mul­ti­ple cards, there are two ap­proaches you can take: the snow­ball or the avalanche. The snow­ball method en­tails pay­ing off your cards in or­der from the small­est bal­ance to the largest, which can help you gain mo­men­tum (much like rolling a snow­ball down a hill). The avalanche method tar­gets debts on the cards with the high­est in­ter­est rates first, sav­ing you more in in­ter­est than the snow­ball sys­tem.

See a credit coun­selor. If you need help, a credit coun­selor can as­sess your fi­nances and de­vise a cus­tom­ized plan to pay off your debt. They also may be able to ne­go­ti­ate with cred­i­tors on your be­half. You can find one at


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