Put Your 2004 Refund to Work Now; Tax Tip from Amerix Corp. Can Help Consumers Whittle Away Hefty Debt

Business Wire, March 3, 2003

Business Editors

COLUMBIA, Md.--(BUSINESS WIRE)--March 3, 2003

This year, if Uncle Sam is sending you a big refund check, think about using it to pay down your credit card balances.

And consider making some tax-related changes that can put your 2004 refund to work now.

How exactly can you do that? Consider adjusting your 2003 tax withholdings for a fatter paycheck throughout the year - and use that "raise" to pay more on expensive credit cards.

By re-calculating the amount of withholdings to increase your regular paycheck, you can use the extra dollars to bulk up the monthly payments you're making on your expensive credit card debt. True, you won't receive a big refund check in 2004, but if you put that extra cash toward your credit card debt starting now, by this time next year, you'll be looking at a lighter debt load.

Think of it this way: a big refund in 2004 can actually cost you - in interest. Some credit cards carry annual percentage interest rates in excess of 20 percent. By whittling down debt on credit like this, you are in far better shape than if you wait for next year's tax refund and pay a year of expensive interest in the interim. If you don't adjust your 2003 withholdings and pay off your monthly credit card bill with your extra cash, the debt and interest that accumulates during 2003 may be more than your 2004 refund.

"If you take this tip to heart and discipline yourself to earmark that extra money to pay for expensive debt, this time next year, you will have gained better control over your financial situation. That sense of accomplishment acts as a great booster shot toward fiscal fitness," said Mike Croxson, president of Amerix Corp., the nation's leading technology and services provider to the nonprofit credit counseling industry.

Counselors at Amerix-serviced credit counseling agencies work with consumers to help them set up budgets and look for ways to make the biggest dent in their debt loads. "We encourage people to look at every income source they have to make the smartest decisions they can to shrink their debt. Changing your withholdings, while not a fix-all, can provide a slight cushion in every paycheck that you can apply toward your credit card balance, " said Cuba Craig, president of American Financial Solutions (AFS), the largest credit counseling agency in the country. AFS, based in Seattle, Wash., offers consumers CareOne Credit Counseling services.

The chart below illustrates how increasing your monthly payments can save you in interest charges at the end of the year. The calculations are based on a $5,000 credit card balance that carries a 13-percent interest rate (average rate):

             Interest
              Rate       Monthly      Payoff            Cost
Balance     (Average)    Payment       Time      (Balance + Interest)
---------   ----------  --------  -------------- --------------------

$5,000         13%        $100    6 Years/1 Month      $7,240.64
----------------------------------------------------------------------

$5,000         13%        $125    4 Years/5 Months      $6,589.26
----------------------------------------------------------------------

$5,000         13%        $150    3 Years/6 Months      $6,237.17
----------------------------------------------------------------------

$5,000         13%        $200    2 Years/6 Months      $5,862.91
----------------------------------------------------------------------

Consumers interested in altering their paycheck withholdings should contact their employer's payroll department.

About Amerix Corp.

Founded in 1997, Amerix provides technology, processing and technology support to nonprofit credit counseling agencies that meet the accreditation standards established by the National Foundation for Consumer Credit or the Association of Independent Consumer Credit Counseling Agencies. Since its inception, Amerix technology has enabled nonprofit credit counseling agencies to assist nearly 1 million people by structuring payment plans to help them get back on their feet. Amerix supports only those credit counseling agencies that do not require up-front fees from consumers seeking help with their debt loads. To reach a credit counseling agency that serves your area, call 1-800-362-4882. Amerix, headquartered in Columbia, Md., is part of Ascend One Corporation, a family of businesses that includes FreedomPoint, Amerix Mortgage and 3Ci.

About American Financial Solutions and CareOne Credit Counseling

Based in Seattle, Wash., American Financial Solutions is the largest nonprofit credit counseling agency in America and offers CareOne Credit Counseling services. CareOne Credit Counseling is the gold standard in the credit counseling industry. Credit counseling agencies that bear the CareOne Credit Counseling service mark commit to operating under stringent principles of honesty, understanding, respect, humility, humanity and caring. Credit counseling agencies that carry the CareOne Credit Counseling services receive consistent, quality service at the greatest value including no start-up or administrative fees, 24-hour, seven-day-a-week accessibility for consumers and industry-leading debt management education. For more information about CareOne Credit Counseling, go to www.careonecredit.com.