GREENPATH FINANCIAL WELLNESS BY:
Most definitions of financial literacy refer to understanding how to properly manage household finances, manage debt, make a budget, and save.
Working towards financial literacy will lay the groundwork for a lifetime of financial health and wellness. GreenPath, as a reputable national organisation, can help you on your lifelong road to financial literacy, particularly in the areas of personal finance, budgeting, saving, and debt management. Whatever your financial situation, take our 3-minute assessment and we’ll work with you to create personalized steps for moving forward.
A situation we see here at GreenPath Financial Wellness when we talk to clients – a gradual increase in credit card debt balances over time with high-interest rates and the ability to make only low minimum payments each month.
A recent client told us about her journey to overwhelming credit card debt.
After moving to a new home, she faced expensive purchases such as window blinds, new kitchen appliances, bathroom fixtures and other essentials. She used both her bank-issued credit card and a store credit card to make the purchases. Unfortunately, she experienced a sudden drop in household income during this time, and on top of it all, had to replace a faulty water heater – so it was a quick journey to maxed out, high interest credit card balances.
Many of us can identify with this predicament. Maybe your credit cards are maxed out, and you're getting calls from collection agencies. The average credit card interest rate is 16.04% according to Creditcards.com. A recent study has shown that about 23% of existing credit cardholders have added to their current debt because of the pandemic. A big amount and accruing interest make it more difficult to get out of debt for people who use credit more frequently and have difficulty making payments or reaching the minimum payments on credit cards.
Figuring out your finances can be tricky. While each person’s situation is different, some steps to take to figure out your finances include:
- Monitor your bills regularly. If your creditor has granted a payment deferment or waived fees, interest could still be accruing. Annual fees could also still apply. It pays to examine each creditor’s terms and fees, to understand where to start paying down first.
- Monitor your credit report to ensure your credit history is accurate. Studies show 1 in 3 Americans never check their credit report yet knowing credit history is key to financial literacy. Regularly monitoring your credit can alert you to errors, protect you from fraud, and provide you important information to strengthen your credit score. GreenPath’s NFCC-certified credit counselors can walk you through a free review of your credit report. You’ll understand how to read your report and how credit scoring works.