Expert Advises Taking Aggressive Approach To Tackling Credit Card Debt
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On the streets of New York, you'd be hard pressed to find someone not concerned about their financial situation. NY1's Shazia Khan came across a number of questions, picked out the ones most frequently asked, and turned to those more knowledgeable for advice. "I have a lot of credit card debt," said one New Yorker. "How do I start to manage it on a monthly basis?"
Credit card debt is a question Eric Salazar tackles every day as a certified financial credit counselor with the not-for-profit GreenPath Debt Solutions. He says the best way to approach mounting debt is to create a budget and track expenses.
"Tracking your expenses, budgeting, making sure you have enough room to pay off these credit cards, paying them off aggressively enough that you're actually making a dent towards paying them down and have a time frame of when that's going to happen," said Salazar of the steps you should take.
Salazar also suggests asking your creditors to lower your interest rates and, of course, cutting up those cards.
Another popular question on the street was in regards to affording college.
"My daughter is in high school, now getting ready to go to college. With the economy the way it is and how everything is costing more, jobs are uncertain, I'm really starting to get concerned about how I'm going to afford for her to go to college in a couple of years," said a parent.
With private lending drying up, investments and home values going down, Bob Rose, executive editor with Smart Money magazine, says while these are troubling times, there are alternatives. And he advises to start your research early.
"The government still has loans both for students called Stafford Loans and for parents called Plus Loans," explained Rose. "Now some of them are subsidized, some of them are not subsidized. It depends on your family income. But those are available. The student loans are limited to depending on what year you are in, up to $6,000-$7,000 a year. The parent loans are unlimited."
Rose recommends parents reach out to the different colleges of interest and inquire about their financial aid packages. Schools are now offering more grants, so, Rose says, don't hesitate to ask for help.
"Many colleges will help you if you give them a call or go on their website," he said. "They want you to come to their school. They don't want you to be frozen out."
Lastly, Rose says take the time now to talk to your teens about the overall cost of college. This way, there are not any surprises down the road.