Credit-card debts are rising to alarming levels. Americans now owe more than $381 billion on credit cards alone, a $44 billion increase so far this year.
Bankruptcies in the last year rose by 1.5 percent, and delinquencies on credit-card payments grew to 3.26 percent of outstanding bills in the second quarter of 1995, the fourth-highest level in a decade.
Many banks, reacting to cardholders' mounting credit-card debts, are doubling credit-card interest rates. According to Bankcard Holders of America, a national nonprofit consumer credit education group: "With the holiday shopping season approaching, consumers could owe hundreds or thousands more on their credit cards and face paying interest rates as high as 25 percent."
BHA urges consumers to take these five simple steps to pay off their credit-card debts:
* Pay off as much of your credit-card balances as possible before the holiday shopping season.
* Replace credit cards with debit cards. Debit cards offer the convenience of credit with the disciplines of checking accounts.
* When paying down credit cards, put the most money toward the highest-rate card -- not the one with the biggest balance.
* Avoid hefty penalty fees and rates. Never pay late or go over your credit limit.
* Don't use all your available credit just because it's there.
To help consumers, BHA offers its Debt Zapper, a personalized credit-card payoff program. Debt Zapper is just $15 ($10 for BHA members).
To order, send a check or money order to: BHA Debt Zapper, 524 Branch Drive, Salem, Va., 24153.
In addition to Debt Zapper, consumers will receive BHA's strategies pamphlet, "How to Reduce Your Credit Card Debt," and BHA's Low-Rate/No-Fee list of card issuers.
