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Citizens Bank offers consumer advice on handling post-holiday debt

Consolidate debts and reduce credit card balances when possible

Providence, R.I. (January 27, 2011) - Citizens Bank is offering financial advice for consumers now that the holiday shopping season is over. Experts suggest consumers take a close look at their credit card statements and holiday shopping bills and consider ways to consolidate or eliminate their debt.

“In the face of an economy that is gradually showing signs of improvement, many consumers have prudently scaled back their holiday spending, although many continue to use their credit cards extensively,” said Ned Handy, President, Citizens Bank, Rhode Island. “In order to maintain good fiscal health, we encourage consumers to consider reducing or eliminating credit card balances with high interest rates by considering a few simple, time-tested methods.”

Citizens Bank suggests the following methods for reducing or eliminating debt:

Pay off any balances: Pay off credit card balances in full whenever possible. Carrying a balance will accumulate interest charges, making the original purchase more costly.  

Pay down as much debt as you can: If you must carry a balance, pay more than the minimum, putting aside any extra money toward your debt. The more you pay toward balances, the faster you'll pay them off. That also means less money paid in interest.

Consolidate your balances: Consider consolidating your debt into a single monthly payment. The end result could be lower interest rates, smaller monthly payments and only a single monthly bill – all things that makes it easier to budget. Shop around, do your homework and read the fine print. Find the credit card with the lowest interest rate, and then determine whether consolidating balances is possible. Be aware that some cards assess a fee for transferred balances, which can negate some of the advantages of consolidation.

Check credit and reduce credit cards: Once a year, consumers should get a copy of their credit report, which is available free of charge, from each of the three main credit agencies. Also consider reducing the number of credit cards in your wallet, which can help you avoid re-accumulating the debt. Do note that cancelling credit cards may impact your credit score; consider cutting up a card without cancelling it or just leave it unused.

Home equity loans and home equity lines of credit: Ask your financial institution about home equity borrowing. A home equity term loan may be an appropriate choice for paying off credit card debt because payments are fixed and usually carry lower interest rates. A home equity line of credit is another option, which provides access and the convenience of credit when needed. Home equity loans and lines of credit may offer tax benefits; consult a tax adviser for specifics.

Keep your debt down: Limit future credit card purchases to necessities. Continually charging purchases can often lengthen the time it takes to pay off your debt. Use cash or a debit card where possible. Most consumers are more conscious of spending when they use cash or the money is immediately deducted from their checking account.

Consider MoneyHelp: MoneyHelp is Citizens Bank’s easy-to-use online resource offering smart solutions, interactive tools and resources designed to help you gain control of your finances and give you future peace of mind. Use MoneyHelp to plan a budget, understand credit, plan for life’s most important events and more. MoneyHelp is available at www.citizensbank.com/moneyhelp.
About Citizens Bank
Citizens Bank is a division of RBS Citizens, N.A., operating its seven-state branch network in Connecticut, Delaware, Massachusetts, New Hampshire, New York, Rhode Island and Vermont. (Add the state-appropriate ending sentence as needed for a state release: It has 51 branches and 131 ATMs in Connecticut. It has 26 branches and 55 ATMs in Delaware. It has 257 branches and 793 ATMs in Massachusetts. It has 83 branches and 199 ATMs in New Hampshire. It has 228 branches and 460 ATMs in New York. It has 82 branches and 195 ATMs in Rhode Island. It has 25 branches and 46 ATMs in Vermont.)

RBS Citizens, N.A. is a subsidiary of Citizens Financial Group, Inc., a $136 billion commercial bank holding company headquartered in Providence, R.I. CFG’s two bank subsidiaries are RBS Citizens, N.A. and Citizens Bank of Pennsylvania. They operate a 12-state branch network under the Citizens Bank brand in Connecticut, Delaware, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont, and the Charter One brand in Illinois, Michigan and Ohio. CFG has non-branch retail and commercial offices in about 40 states. CFG is owned by RBS (The Royal Bank of Scotland Group plc).