Finding Your Best Debt-Payment Strategy

When high-interest credit cards, medical expenses, or loans begin to consume your income, it can create a sense of being stuck.

IAM members have access to professional financial counseling through their Legal and Personal Protection Plan benefits, and can get expert guidance to help pick the right strategy.

Here are the three most common debt-payment plans:

1. The Smallest-Balance-First Method

If you feel overwhelmed by the number of bills arriving each month, then this method might be your best bet.

• How it works: You pay the minimum on every debt except the smallest balance. Then, you put every extra dollar toward that smallest debt balance until it’s fully paid. Then, you move to the next smallest.

2. The Highest-Interest-First Method

If you want to pay the least amount of interest possible and don’t mind waiting a bit longer for that first “paid in full” notification, try this one.

• How it works: Focus entirely on the interest rate. You pay the debt with the highest APR (usually a credit card) first, while paying minimums on the rest.

This is the most cost-effective way to pay off debt. You’ll save the most money over time because you’re eliminating the most expensive debt first.

3. The Loan Consolidation Method

If tracking multiple due dates is causing too much stress, consolidating might be the answer.

• How it works: You take out one new loan (ideally at a lower interest rate than your current cards) to pay off all your other debts. Now, you only have one monthly payment to worry about.

Get an Expert Opinion

Choosing a plan is a big decision, and what works for a co-worker might not be right for your family. That’s where your IAM Legal Plan comes in.

As an IAM member, you gain access to specialized financial counseling services designed to address your unique needs. We’ve partnered with The SafeGuard Group, a reputable Nonprofit 501(c)(3) Agency, to provide:

• Personalized financial analysis and advice tailored to your specific situation.
• Comprehensive budget reviews, debt analysis, and credit line assessments.
• Referral to Debt Management Programs (DMPs) for those struggling with debt, potentially leading to:
  • Reduced or eliminated interest rates.
  • Waived late or over-the-limit fees.
  • Lower monthly payments.
  • Debt consolidation for simplified payments.
  • A path to debt freedom in five years or less.

Tap below to learn more and fill out a form for immediate assistance, or call the Member Helpline at 646-921-9128.

While you can access some features without signing in, a portal account unlocks the full benefits of your Legal and Personal Protection Plan. Tap here to create your account!