I recently interviewed personal finance expert Lynnette Khalfani-Cox, author of “Zero Debt: The Ultimate Guide to Financial Freedom.” Here are Lynnette’s views on how consumers can exercise self-control when it comes to personal finance.
In my book “Zero Debt: The Ultimate Guide to Financial Freedom,” I talked about how I ran nearly $100,000 in credit card debt which I paid off in three years.
One of the most interesting stories I came across was that of a financial trader who enrolled in a debt management seminar. This guy had $1 million in credit card debt but was making $1 million a year in his job at Wall Street.
He could no longer keep track of his payments because he had several dozen credit cards. Despite his high income, he was running late on payments. People have different thresholds of pain, and the burden isn’t always having to pay high interest rates. It could also be large balances.
Lynnette also talked about financial infidelity, and its negative effects on a relationship. A Kansas State University study shows that financial problems — not sexual infidelity — is the number one cause of divorce in the United States.
A common situation I see is when a spouse hides credit card debt from their partner because they’re fearful about how to come clean. Financial infidelity is way more common than most people think. My advise is to not let yourself get overextended in terms of credit limits. Credit and debt are inextricably linked.
To get climb out of debt, many people look for creative strategies such as increasing income through a part-time job, a second job, or a new business venture.
Monitoring Credit Scores
Earlier this year, Capital One announced the launch of Credit Tracker, a “free, interactive tool gives customers easy access to their credit score, plus a credit bureau summary, a report card with letter grades on the key factors driving their score, a credit simulator that shows how a customer’s actions can impact their credit score and credit bureau monitoring that provides timely alerts that can help warn customers of potential fraud,” according to a company press statement.
“When the topic of credit scores is avoided, that’s a common warning sign for spouses who are concerned about their partner’s personal finance,” says celebrity wedding planner David Tutera, who recently attended a Credit Tracker event in New York City. “Spouses should be on the lookout for unclear answers and know their partner’s financial situation before walking down the isle.”
Credit Tracker makes Capital One the first top 10 credit card issuer to give customers free access to a free credit monitoring tool. Credit Tracker is available to U.S. customers with a Capital One branded consumer credit card through the Capital One mobile app as well as through the company website.