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Are you maximizing the benefits on your job as part of your debt reduction plan? If you haven’t paid much attention to the types of employee benefits offered by your company, you’re doing yourself a disservice. Find out if your employer has any of the following programs that can help you avoid debt.

Debt counseling and financial classes

Knowing that many workers are struggling in this economy, some employers are setting up special workshops or classes aimed at improving budgeting skills, paying off credit card debt, or getting on track with saving for retirement. Find out if there are free workshops or referrals to debt counseling or other financial professionals who can help you.

Health savings accounts

Pretax contributions to a health savings account (HSA) can allow you to reduce the amoung of take-home pay that’s taxed. Money stashed in HSAs can be used for medical expenses as needed and avoid running up high health care bills. Medical debt is one of the most common contributors to people filing for bankruptcy.

Flexible spending plans

A flexible spending plan (FSA) can help you pay for child care expenses and some health expenses. FSAs allow you to use pretax dollars, which can decrease your overall tax bill, boosting your take-home pay. Many workers are missing out on this benefit. A Business Insurance article states that an average of 20 percent of eligible employees made FSA contributions in 2010.

Tuition reimbursement plans

If you need to take some classes to gain new skills or move up on your job, find out if there is a employee tuition reimbursement plan available. Tuition reimbursement can help you avoid wracking up student loan debt. There may be restrictions on the type of programs that qualify, so check with your benefits department to get all the details.

These are just a few of the types of employee benefit programs that might help you improve your financial situation. Don’t just ignore the employee benefits manual at your company. Take time to read it carefully to find the programs that can help you.

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U.S. consumers appear to be working hard to reduce credit card debt, which has fallen nearly 3 percent between January and August 2010, but their credit scores are also decreasing. What’s going on? Credit Karma CEO, Kenneth Lin, cites prolonged unemployment and depressed housing markets as primary causes. Consumers accustomed to drawing against home equity may now have to rely on using credit cards after their home equity diminished or disappeared; consumers facing long term unemployment may be forced to use credit cards to meet essential expenses.

Consumers relying on credit cards: As balances increase, your credit scores decrease

Credit scoring partially relies on your “credit utilization ratio,” which is the amount of your credit card debt divided by your total assigned credit lines. Let’s use Suzie Q Shopper as an example. Susie has 3 major credit cards with a total credit line of $20,000. She owes $6500, $3700, and $1200 on her three cards for a total of $11,400. Susie’s credit utilization ratio is 57 percent of her total available credit; experts recommend not exceeding a total credit utilization ratio of one third of your total available credit.

Getting debt help: Low cost debt consolidation programs

Consumers carrying high credit card debt also struggle with high finance charges. The annual percentage rate (APR) is the total finance charges associated with a credit card expressed as an annual percentage of your debt. Using Susie’s credit card balance of $6500 as an example, let’s say that her APR for this credit card is 23 percent. This means that Susie is paying approximately $1495 annually if her balance and APR remain the same for one year. You could probably do a lot with that amount; paying off credit card debt can help stabilize your finances and provide the flexibility you need for saving and enjoying life.

I can’t qualify for a debt consolidation loan. What should I do?

Unfortunately, debt consolidation loans often require good to excellent credit, and as unsecured loans, they may not be available for an amount sufficient for credit card debt consolidation. If you owe thousands of dollars in credit card debt, you may qualify for debt consolidation and credit counseling help. These services typically work on a non-profit basis and provide services including:

• Reviewing your finances and developing a cash budget based on your income and obligations
• Negotiating with creditors to reduce APR and payment amounts needed to repay debt within your new budget
• Acting as debt consolidators by charging you one monthly amount that is distributed among your creditors after deduction of the credit counseling agency fee

Time is money when your credit card debt is accruing finance charges. Get debt consolidation help today.

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