MasterCard’s Debt Know How Program
Credit card companies often play a significant role in people’s debt problems. If MasterCard has its way, however, it is going to be a significantly positive role. In order to achieve this role, they must not only overcome popular perceptions but also the 32 percent of Americans who feel they are doing the “best possible job” when it comes to managing debt.
Fortunately, 30 percent of respondents indicate having more information about debt management would help them reduce debt faster and more efficiently. Even better, the survey, which was conducted by MasterCard International, indicates that 16 percent of respondents have sought professional advice at some point to help them pay off debt.
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To help those seeking more information, MasterCard has launched a consumer education campaign called Debt Know How that empowers and educates consumers using free, easy to understand tools including:
- Free, easy-to-use information, tips and resources available from www.debtknowhow.com.
- A curriculum, developed in partnership with the University of Minnesota, for educators and personal finance coaches including teaching guide, class outline, worksheets and other tools for teaching a 1 to 2 hour class on debt management.
- Training sessions for educators and personal finance coaches using the Debt Know How curriculum will be offered throughout the country taught by an Accredited Financial Counselor and educator from the University of Minnesota.
Among the tools emphasized in the Debt Know How are the Smart Steps to Get Out of Debt. Some of the steps are familiar. For example 27 percent of Americans report they have used a credit card to track their spending. Tracking Spending is one of the Smart Steps. Other steps are:
- Assess Debt More than just determining the total amount of debt, this also includes comparing debt with income and projected necessary spending.
- Goal SettingSetting goals and prioritizing debt helps make debt seem less overwhelming.
- Exceeding Minimums Understanding how paying more than the minimum can be critical first step in reaching goals and reducing debt.
- Understanding Interest and Late FeesKnowing what the late fees are on all accumulated debt and learning how to avoid them.
One of the most useful tools on the Debt Know How web site is the Debt Warning Signs quiz, which helps individuals catch small money management problems before they become crises. There is also advice on helping family and friends who are working to try to get out of debt.
Too often, credit card companies are only seen as part of the problem. Hopefully, through efforts like this, at least one can be part of the solution.