Credit card debt could haunt consumers in a slumping economy

During the prosperous 1990s, Americans were quick to charge vacations, appliances, clothes or anything else that they wanted for that matter. Now with the economy in reverse, many are wondering what they are going to do with all those charges.

"These are worrisome times for debt-strapped consumers," said Lori Pridgen, director of community relations for Consumer Credit Counseling Service of South Texas. "Many have little in the bank and are only a pink slip away from falling behind on their payments."

Many households make a huge payment to credit card companies each month. That's because the average family with at least one credit card has an outstanding balance of $8,488, reports CardWeb, a payment card information network.

Many Americans are already falling behind, and some Wall Street prognosticators say an economic recovery is a year away. During the second quarter of this year, one of 25 credit card holders was past due compared to one in 33 during the first quarter.

If you are worried about your revolving credit card balance, here are tips from CCCS of South Texas, a non-profit community service organization that offers counseling and education on credit and budgeting.

DEBT REDUCTION TIPS FOR CONSUMERS

Total up all your debts. Believe it or not, the average household has 14 credit and debit cards. It's time to total up those charges and develop a repayment plan.

Compare interest rates. Interest rates are dropping and could go lower thanks to the Federal Reserve Board's multiple interest rate reductions. If you haven't compared rates recently, you could be paying too much. Click on www.CardWeb.com and www.Bankrate.com to see what interest rates, grace periods and annual fees other credit card companies are offering.

Watch your money. A swollen credit card statement can be a symptom of a bigger problem - overspending. The first step to putting the brakes on overspending is to track your expenses for a month. You can use this information to develop a spending plan and cut unnecessary expenses.

Shelve the credit cards. Pay with cash. Put money aside each week for purchases you would otherwise place on credit. Don't make major purchases until you save up enough money to pay cash. Build an emergency savings account. Otherwise, you will go into debt every time an unexpected expense like a car or home repair occurs.

Seek professional assistance. If you need help with credit management or developing a spending plan, call CCCS at 800-333-HELP to talk to a certified credit counselor.

Heed this advice and you will be less likely to find yourself in a credit card bind should the economy continue to slow.

For help with money management or budgeting, contact CCCS. CCCS is a nonprofit, community service organization that provides confidential counseling, guidance, debt management, and education programs to financially troubled consumers. CCCS is a member of the National Foundation for Credit Counseling.