November 23, 2015
Washington, DC – Each summer Americans take pride in celebrating the Fourth of July, the day that commemorates the 1776 adoption of the Declaration Independence proclaiming the country’s freedom from what is now known as the United Kingdom.
This July 4, 2014 the National Foundation for Credit Counseling® (NFCC) challenges Americans to declare their own personal financial independence by making a commitment to become free from the bondage of debt.
“The stress of unmanageable debt has destroyed marriages, shattered families and contributed to lost jobs,” said Gail Cunningham, spokesperson for the NFCC. “No one ever scripts financial ruin as a part of their life plan, but when financial distress occurs, it is a very real part of a person’s daily activities, as debt is a burden people carry with them 24 hours per day.”
Aside from the personal problems associated with debt, consider the following financial reasons to take action and begin to resolve your debt issue now:
- A blemished pay history reflecting late or missed payments tarnishes a person’s credit report which could result in a lower credit score;
- A low credit score often equals a higher interest rate when borrowing money, making the cost of credit more expensive;
- A tarnished credit record could diminish access to additional credit needed for emergencies or unplanned expenses;
- With an unrealistic amount of money earmarked for debt repayment, saving investing is often neglected, and
- Planning for future needs such as college or retirement is often delayed due to a lack of money.
People may mistakenly think they are responsibly managing debt by making the minimum payments due on time every month. They don’t bother to calculate how long it will take them to become debt free, or how much they will have paid in interest. Consider the following example:
With a $10,000 credit card debt at 18 percent interest, even if a person never adds any purchases or fees to the account, and makes a monthly on-time payment of two percent of the balance, it will take them 48 years to become debt free. Further, that original debt of $10,000 will cost them $36,825, with $26,825 going toward interest.
There is a way out from under the oppressive weight of debt. NFCC Certified Counselors help millions of people each year overcome financial challenges and find the financial stability they seek. To be automatically connected to the NFCC member agency closest to you, dial (800) 388-2227, or find an agency online by visiting www.NFCC.org. Ask about the Sharpen Your Financial Focus™ program which includes financial diagnostic tools, workshops and one-on-one sessions with financial professionals, putting you on the path toward a debt-free lifestyle.
The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation’s largest and longest serving national nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services. NFCC Members annually help millions of consumers through more than 600 community-based offices nationwide. For free and affordable confidential advice through a reputable NFCC Member, call (800) 388-2227, (en Español (800) 682-9832) or visit www.nfcc.org. Visit us on Facebook: www.facebook.com/NFCCDebtAdvice, on Twitter: twitter.com/NFCCDebtAdvice, on YouTube: www.YouTube.com/NFCC09 and our blog: http://financialeducation.nfcc.org/.