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Couples’ Guide to Tackling Credit Card Debt

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By Eva Norlyk Smith, Ph.D.
July 6, 2011

Even in the best of times, disagreements about money are a common source of conflict for many couples. However, when couples get into too much debt, the stress and difficulties that ensue can easily overwhelm and lead to serious relationship problems.

For many couples unable to make ends meet, credit cards easily become the preferred solution, says Melinda Opperman, senior vice president of community outreach and industry relations at the nonprofit credit management association Springboard.

“Unfortunately, that just masks the underlying issues, and such couples often end up getting deeper and deeper into debt,” notes Opperman in an email. “In the face of recession we’ve seen couples waiting too long to address the problem, and then the credit card debt becomes unmanageable.”

Couples looking to pay down debt often have to navigate challenging relationship dynamics. For this reason, it’s all too easy for debt issues to translate into relationship problems. To help you not just pare back debt, but come out stronger as a couple, here are six tips for dealing with credit card debt.

1. Face the facts. As long as there is credit left on the credit cards, it’s easy to ignore the reality that you two are not making ends meet and getting deeper into debt every day. Get real and face the facts. Avoid the temptation to believe that things will get better tomorrow, that maybe one of you will find a higher paying job, get a raise or win in the lottery. Being in denial, unfortunately, won’t solve your problems.

2. Talk. Most likely one of you will realize that something is amiss before the other does. According to Opperman, it’s not unusual for one partner to see the importance of addressing the couple’s financial concerns and make necessary life changes, while the other partner is not ready to face reality.

To establish common ground, it’s key to sit down and talk. This can be a delicate process, so it’s important to approach it the right way. When talking with your partner about difficult money topics, you get much further if you begin by framing the discussion in a positive way, says Sandra Hanna, co-author of “The Smart Cookies’ Guide to Couples and Money: Earn More, Argue Less, Achieve the Life You Want . . . Together.”

“It’s so easy to play the blame game, especially if one person is accumulating more debt than the other,” says Hanna. “But don’t point the finger, it will just make your partner defensive.”

Instead, Hanna says, suggest a time where you can sit down to talk in a neutral place about your financial goals as a couple. Debt often accumulates when you live without reference to long-term plans and goals. Once you spend some time talking about what your long-term goals are, it should become obvious that your current spending habits won’t help you reach those goals. Let the conversation about how to pare back your debt grow out of that realization, rather than forcing it on your partner.

3. Get an overview of where you stand. Once you decide it’s time to tackle your debt problems, sit down and create an overview of your financial situation, if you haven’t done so already.

Write down your total fixed monthly living expenses, including mortgage and other debt payments, rent payments, food expenses, transportation and other fixed costs. Be sure to include periodic expenses, such as insurance, as well as future expenses coming up within the next year. Subtract the total fixed expenses from your combined total monthly income to get the amount of money left over each month to pay down credit card debt.

For each of your credit cards, list the balance, the interest rates, the minimum payment due each month as well as the monthly payment you’d have to make to pay the debt off in three years (you will find this information listed on your credit card statement). Of course, you can pay credit card debt off faster or slower, but the three-year benchmark is a good starting point.

4. Make a plan. Now that you have a rough overview of where you stand, it’s time to make a plan. If you have enough money left over at the end of the month to make the payments that would erase all credit card debt in three years or even faster, congratulations! You can pride yourself with taking steps to tackle your debt before it gets out of hand. However, it’s always preferable to get rid of debt faster, so you still want to consider the tips listed in point 5 to pay off the debt more aggressively.

On the other hand, if you don’t have enough money left over at the end of month to even pay the minimum on the credit card debt, your finances are in need of some time in the intensive care unit. In situations like this, you might consider seeking the advice of a trustworthy credit counselor, who can help you get your financial situation back on track.

Most people fall somewhere between these two scenarios. Irrespectively, the next step is to free up money to pare back your credit card debt faster.

5. Look for ways to generate more cash. To free up money in your budget for debt payments, you’ll have to agree to cut unnecessary expenses. And most likely, you will have different ideas about what constitutes unnecessary expenses. Saying ‘no’ to something you’re used to having is never easy, and it’s even harder when you have to agree with someone else to do it.

For ideas on where to cut, see this list of ways to free up money to pay back credit card debt faster. Start with the things you can easily agree on, and if that’s still enough, tackle some of the less obvious ones. Also look for ways to consolidate credit card debt to reduce the interest you’re paying.

6. Talk some more. If you two have unresolved issues around money, they are bound to come up during a challenging time like this. Chances are that you two will be forced to confront sensitive topics you so far have tended to avoid.

“Often the arguments are more about how the money is to be spent than on how much money couples have,” says Opperman. “Money represents the values, expectations and personal meaning that is attached to the money. That is often the true root of the argument. Unfortunately, many couples never figure this out.”

It is said that the couples who last are those who are able to work through conflicts. Resolving your debt issues will challenge you to develop greater financial intimacy. However, if you rise to that challenge, you will likely find that it also leads to greater emotional intimacy.

Of course, the opposite can also be true. Because couples struggling with credit card debt typically face challenges on multiple fronts, it’s often a good idea to seek help from an independent third party, such as a credit counselor. A credit counselor can help you develop a financial action plan tailored to your unique situation. Working with a neutral, third party can also be a great way to take the edge off the emotional underpinnings of the problems you are facing.

“A credit counselor can communicate to the couple that it’s not financially irresponsible to have a circumstance out of your control,” says Opperman.