CLEVELAND, March 23, 2015 /PRNewswire/ -- Financial
health doesn't require living debt free. According to the Consumer
Financial Protection Bureau, there is nothing wrong with having
debt as long as you manage your debt responsibly and are not
overwhelmed by the amount of debt you've accrued.
The tipping point varies when it comes to managing debt and
having debt manage you. Generally speaking, however, it's best to
have a low debt to income ratio, or DTI. DTI refers to the
percentage of debt – your total monthly loan payment – to your
monthly income before taxes. You should aim to keep your DTI
at 40 percent or less, particularly if you want to qualify for a
loan with low interest rates.
Feel as if you've past your personal debt tipping point? KeyBank
has some suggestions to help you regain your balance:
- Scrutinize your spending habits, focusing on what you buy
because you want it, and not because you need it. Consider how
often you use credit to buy those extras, and whether you should
reserve credit cards for major, significant purchases you can pay
off promptly.
- Create a budget, and stick to it. Consider tapping online and
mobile banking tools that make it easy to check account
balances and transactions.
- Regain control of credit card debt with a debt elimination plan
so you make steady progress toward reducing card debt. Tackle your
high interest cards or your low balance cards and pay as much as
you can on those cards while making minimum payments on other,
lower interest or higher balance cards.
- Consider debt consolidation and talk to your banker about your
specific situation; consolidation might increase the amount of time
and money spent to eliminate debt. Once you're comfortable with
your credit card account balances, pick one card to cover
unexpected necessary expenses and pay cash or use your debit card
for the rest.
- Build an emergency fund so you can choose between tapping
credit or your emergency fund for unexpected major expenses.
Allocate extra income – a bonus or pay increase – toward
eliminating debt or boosting your emergency fund.
- Be patient. Regaining control over debt takes time. But
the wait is worth it.
This material is presented for informational purposes only
and should not be construed as individual tax or financial advice.
Please consult with legal, tax and/or financial advisors. KeyBank
does not provide legal advice.
About KeyCorp
Key traces its history back more than 160 years and is
headquartered in Cleveland, Ohio.
One of the nation's largest bank-based financial services
companies, Key has assets of approximately $93 billion. Key (NYSE:KEY) provides deposit,
lending, cash management and investment services to individuals,
small and medium-sized business under the name KeyBank National
Association. Key also provides a broad range of sophisticated
corporate and investment banking products, such as merger and
acquisition advice, public and private debt and equity,
syndications and derivatives to middle market companies in selected
industries throughout the United
States under the KeyBanc Capital Markets trade name.
For more information about Key, visit www.key.com, or follow Key
on Twitter at @KeyBank_News and @KeyBank_Thrive.
Banking products and services are offered by KeyBank National
Association. Key.com is a federally registered service mark of
KeyCorp. ©2015 KeyCorp. KeyBank is Member FDIC
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SOURCE KeyCorp