Many struggle with debt

May 16, 2008 10:56 am

— By KANDACE MCCOY
kandace.mccoy@register-news.com
MT. VERNON — The Federal Reserve reported recently that Americans have increased their borrowing at an annual rate of 7.2 percent, and with The Fed also reporting that outstanding revolving consumer credit hit $957.2 billion for March, it may be no surprise that debt counseling sessions have also increased.
According to Beverly Caudill of Clear Point Finanical Solutions, the number of counseling sessions increased in 2007 by 12 percent, with Clear Point seeing a “steady increase since 2004” and currently climbing.
“[Credit cards] are one of the major topics people are contacting us about,” Caudill said.
Clear Point, located at 123 South 10th Street, is a nation-wide nonprofit community service organization which has been educating consumers on how to better manage their money and pay down debt since 1979.
Caudill is a counselor who helps consumers with issues such as managing credit spending, dealing with income reduction and increased living expenses. “We try to help clients develop healthy credit habits with managing and spending credit,” she explained.
Earlier this year, The New York Times reported that increases in outstanding credit card debt could indicate a strong economy, with confident consumers spending more, or it could indicate that consumers find it difficult to pay their bills.
In any case, Caudill says those who find themselves in a financial situation beyond their control should seek help as soon as possible. “What we try to get out to the general public is if you’re already having problems managing financially — get help.”
Caudill says Clear Point offers a number of solutions regarding household budgets. “Save, save, save,” she advised. “Pay yourself first. That applies to everyone.” She added that by establishing and growing a savings account, households will go a long way saving financially. Also, she suggests consumers should “start small and work your way up to something larger.”
Caudill also counsels consumers on budgeting. By creating a budget and tracking all income expenses each month, consumers can identify monthly resources, such as spendable income. A budget can also help identify areas in which spending can be adjusted.
“Credit spending is a problem,” she further explained. “That seems to be getting everyone in trouble and with credit cards making offers readily available, [some] people seem to lose control of spending.”
And for those who have difficulty making minimum payments each month, Caudill said Clear Point has a debt management program option in which the organization works with creditors to help lower interest rates, stop rising fees and “make it affordable for credit card debt” for consumers.
“We try to educate them to help them make appropriate and correct financial choices,” Caudill said.