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Managing Debt

All too often, people are too ashamed or embarrassed to seek help with credit card and unsecured personal loan debt, so they try to deny or ignore the problem. But the longer they wait, the more the debt can pile up. It's important to always manage spending, reduce what you owe and get assistance if and when you need it.

Imagine being debt-free. If your debts were paid off, you could have more money available to save for retirement, emergencies or vacation. Most importantly, you could stop worrying about how to make ends meet and enjoy more peace of mind.

A budget is simply a sum of money needed or available for a particular purpose. If you've never used a budget to manage your financial needs, now is the time to start. Just follow these steps:


  • Track your spending to see where the money goes, relative to your income.
  • Find out how much you need each month to make all your payments.
  • Make as tight a budget as you can and stick to it.


The trick is to manage debt so that payments are always well within your means. Try to budget debt payments (other than rent or mortgage) at no more than 20% of your monthly income.

Once you have a budget and know how much you have available to spend, use it effectively for controlling your debt. Here are some suggestions:


  • Pay more than the minimum payment. Even a little more each month can help reduce your debt faster. You can set this up quickly and easily in Online Banking.
  • If you have more than one credit card, after you make the minimum payments on all your cards, pay the credit card balance with the highest interest rate first—you'll save money over the long run.
  • Consider a balance transfer or debt consolidation loan—but only if you can save on interest and avoid getting into more debt. To learn more, access Online Banking.
  • Stop using credit cards for non-essential purchases—just say “no” when you don’t have the available cash.
  • Learn to negotiate with vendors—not every price is set in stone.
  • Use unexpected money such as gifts or tax refunds to pay down your debt.
  • Talk to your creditors—depending on your financial situation, they may have suggestions or options available to help reduce your debt.
  • Don't be afraid to seek professional help if you need it. Visit credit counseling for debt assistance in the United States.


Maybe you've had some major debt trouble in the past and you'd like to find a way to start fresh. Or maybe you never realized you had a debt problem until you were turned down for a loan or had your rate increased on an existing credit card. All of these situations can be signs of a debt problem.


You can't fix the problem until you know exactly what it is. Therefore, your first action should be to get a copy of your credit report from one of the three U.S credit reporting agencies. Visit Equifax, Experian or TransUnion to obtain your credit report.

Visit Equifax, Experian or TransUnion to obtain your credit report. Review your credit report carefully and mark every suspected error. If your credit report includes incorrect information, contact the credit reporting agency immediately. They will review your report, investigate your claim, and make the correction if one is called for.


Even if the negative items are true, you can still make things better. If the entry refers to an unpaid debt, contact the creditor to negotiate payment options. If there has been a dispute, you can ask the credit reporting agency to add a note to your credit report explaining your side of the story.


The good news is that, as you improve your habits, most of the negative entries may eventually fall off your report over time. This is more the reason to start as soon as possible managing your debt effectively.

If you are in financial difficulty, it is in all our interests to get it resolved. Contact us to explore your options by logging in to Online Banking or calling Customer Service at 855.891.3401. The earlier you contact us the sooner we can work together to come up with a solution.


If you have recently changed your address and telephone number, please update your contact details online through Online Banking or by calling Customer Service at 855.891.3401.


Besides Bank of America, you can also get free help and credit counseling from Bank of America, as well as a wide range of external resources.