New research from the Principal Financial Well-Being Index shows that the economy is the greatest source of stress for Americans, followed by their personal finances, job and health. According to the 52 percent of retirees and 42 percent of workers, the cause of a high stress level is the economy, while according to the rest 30 percent of retirees and 34 percent of workers, personal finances is the cause of the stress. On the recent economic surface, personal finances are getting worse and people are incurring more into debt, and looking for ways to achieve debt relief. According to the latest statistics of Federal Reserve, the total amount of consumer debt in the United States stands at nearly $2.4 trillion and is expected to rise in the future.

Experts think that the main cause of the consumer debt is the indiscreet use of credit card and taking out incessant loans during the event of poor finances. Often people take out loans without understanding their terms and conditions that even cause people incurring debt. Banks and financial institutions offer loans and credit cards to the consumers at high interest rates and under many other terms. So when people default on their loans , they accrue penalties and charge-offs that further lead them falling into debt. So to avoid such circumstances, people must be ware of the terms and conditions associated with the loans.

Even small fees can take their toll on your finances, so try to avoid fees whenever you can. With a little know-how, you can help keep fess and interest charges to a minimum and can refrain yourself from falling into debt.

Minimize interest charges :

Always keep the balance of your credit card low. The lower the balance, the lesser the interest you will have to pay. If your card offers a grace period, avoid paying interest on purchases by paying your account in full each month. But for bank cash advances, balance transfers, or direct deposit and check cash advances, you will need to pay interest from the very first transaction. No matter the type of transaction you have, if you cannot pay your balance in full, you will have to pay more than minimum monthly payments. This can reduce your interest costs.

Avoid late fees :

Pay your bills on time so that you can avoid paying late fees. Banks and financial institutions charge high late fess, so if you cannot pay your bills within stipulated time, you will have to pay late fees. Remember, if you have a history of missing credit card payments and don’t have a strong credit, you will not going to be able to talk to the customer service rep regarding waiving off your late fees. Hefty late payment fees often incur people into debt and ruin their personal finances.

Pay less on transaction fees :

Transaction fees are usually put on the amount of your transaction that you cannot avoid to pay, but can off course reduce it. Do you make lots of small transactions in a month, or a few large ones? Do you like to do your banking via internet and telephone, or comfortable with automated teller machines? Determine the habit of your transaction and find out the lowest-fee bank account depends on your banking habit.

Some tips to follow :

  • As soon as you receive your bank statement, check the due date as soon as possible. If you bank online, sign up for an e-mail alert to remind you to pay your bill on time.
  • Try to email your payment at least seven business days before the due date.
  • Change the due date according to your convenience. But keep in mind that this may take up to a month to be in effect, so plan ahead.

In conclusion, people are often unable to manage their personal finances because of having an overwhelming debt. Knowing some of the banking terms can avoid you getting dinged for unnecessary fees that often incur you debt. So bear the above mentioned advices and banking terms in mind to avoid falling into debt.