Financial Wellness

Dealing with any kind of debt, let alone multiple types of debt, can be stressful. This blog will provide an overview of managing credit card payments, different loan options, and the recently resumed student loan payments. TruChoice is here to answer your questions and provide guidance on how to handle these payments and manage a budget. 

Credit card payments

Dealing with credit card debt, especially high-interest debt, can be stressful and confusing. Don’t worry, we have solutions for how to handle this type of debt. It is important to pay more than the monthly minimum payment when possible. Look on your credit card bill for a Minimum Payment Warning: this will be a table showing how long it would take to pay the full balance if you paid only minimums and includes how much interest you would pay. It is also important to understand that just paying the minimum payment does not mean interest is paid off.

There are multiple strategies that can help relieve credit card debt. One popular method is called debt snowballing. List out your debts by amount, then focus on paying off the smallest one first by paying as much over the minimum as you can each month. Once you’ve paid off that, take the amount of that payment and add it into the amount you’re paying toward the next smallest debt, and so on. This method creates momentum for paying off debt.

Review the interest rate on all your cards and transfer the high interest balances to a low interest card.  If you currently have a 0% APR, and the intro period is ending and moving to a much higher APR, a balance transfer to a credit card with a lower rate can help save you money on interest. Unlike other credit cards, the TruVisa Credit Card has no balance transfer fee or cash advance fees; learn more on our website.

Loan Options

Different types of loans can also be used to consolidate debt, which can avoid potential high interest. A personal (or consolidation) loan can be used for various purposes, including debt consolidation, home improvement projects, large purchases, and emergencies. Sometimes you may see personal loans advertised for specific purposes — home improvement loans, travel loans or medical loans — but they usually function the same way.  At TruChoice, we also have options for both home equity loans and auto equity loans. An auto equity loan works in a similar way to a home equity loan. If your car is worth more than what you owe, it is possible to tap into that equity. This is one of the many services that TruChoice uniquely offers. One advantage of an auto equity loan is that it usually has significantly lower interest rates than a personal loan. 

Student loans

There are multiple new options available for managing student loan payments, which just recently started accruing interest again in September 2023. Most borrowers’ first payments will be due in October 2023. There are different options available for repayment, including income-driven repayment  (IDR). These plans only take a few minutes to apply for and can help reduce your monthly payments. Check with your loan lender and Federal Student Aid for more information. Make sure you are only going through authorized sources for these options.  If you have concerns about managing this debt, the best option is to reach out to your student loans lender directly.

In some specific situations, borrowers may qualify for loan forgiveness, or additional repayment options.  Learn more at Federal Student Aid.  As payments resume, there is also an on-ramp period through Sept. 30, 2024, which protects borrowers from having a delinquency reported to credit reporting agencies. This prevents the worst consequences of missed, late, or partial payments.  If you feel like you may miss payments, or need additional payment options, we highly recommend reaching out to your lender before skipping payments – there may be options you do not know about. We are here with advice and personalized strategies if you have questions for how to handle multiple payments and build your budget now that these payments are resuming (or, for recent graduates, starting for the first time).

TruChoice cares about our members as people. When helping someone with their finances, we look at the bigger picture and listen to their story. We are sympathetic to the many things that can happen in life and believe understanding the why behind our members’ situations is extremely important. If you have questions about managing debt, contact us and we can help get you there from here.