Are you approaching your own debt ceiling?
Sara Gilbert/The Coloradoan (Fort Collins, CO)
20 May 2011

(GreenPath note: Sara Gilbert, group manager in Colorado writes an ongoing column for The Coloradoan.)

Have you reached your personal debt ceiling? If you read the newspaper, you know the United States hit an ominous target this week by reaching the maximum allowed debt limit or debt ceiling.

Congress sets limits on the amount of money this country can borrow, and we reached that limit this week, which is in the trillions of dollars. There are complexities about the solutions for this issue that we face as a country, and this column will leave those complexities and their solutions to our representatives in Washington, D.C.

But the idea of a debt ceiling for individuals and their personal budgets is an intriguing one. Individually, as consumers, we owe $852 billion in credit card debt, according to the Federal Reserve. For families that carry credit card debt, this averages out to $4,964 per person, according to a study conducted recently by TransUnion. Credit card debt can cause unnecessary stress to anyone who doesn't pay off their credit card balances at the end of the month because the money that is paid to interest on debt each month is not available for other spending needs and savings choices.

In 2010, about 51 percent of Americans carried over a credit card balance from month to month. Making only the minimum payment due on the credit cards will cause you to take many years, usually decades, to pay off the debt. At GreenPath, we speak to hundreds of clients every day about ways to pay off or pay down their debts.

While the U.S. government has its hands full with the great debt it carries, individual consumers could reduce a lot of stress in their lives by making a plan to repay debts. Here are some pointers that might suggest you are nearing your own personal debt ceiling:

» I use credit cards to pay for things because my cash runs out before payday rolls around again.
» Everything would be better if I could get a consolidation loan to pay off my credit cards.
» I sometimes hide the things I purchase so my family/spouse does not see that I have made a new purchase.
» Credit card payments exceed 15 percent or more of my monthly income.
» I usually only pay the minimum balance on my credit cards.
» I have lost sleep about how to pay for an emergency because my credit cards are maxed out.
» I have a hard time saving money because I have credit card payments to make.
» If I lost my job, I would have immediate concerns about paying all of my bills on time.

Answering yes to even a few of these might signify that you could benefit from a free counseling session from a counselor at GreenPath to look for options to repay your debt. Waiting to seek help can make your problem worse.

Counseling sessions are geared to helping clients look for options to repay debts and get on top of their budgets.

Reducing your debt and the amount you pay each month will reduce stress in your life.

Sara Gilbert is the Colorado group manager for the local GreenPath (formerly Consumer Credit Counseling Service), 1247 Riverside Ave., Fort Collins. Call her at (970) 229-069 or send email to sgilbert@greenpath.com.