Yahoo Finance

Millions of Americans get their social security benefit checks on most Wednesdays every month. How does the payment schedule work though? Here with more, we've got Yahoo! Finance Senior Columnist, Kerry Hannon. Kerry, what do we know on this?

Hey, Brad. Um, yeah, people get a little confused about this, but you figure Social Security Administration has 70 million people that are sending checks out. So they do these in batches based on your birthday. So, if your birthday is between the first and the 10th of the month, you will get your payment sent on the second Wednesday of the month. If it's between the 11th and the 20th, it's the third Wednesday. And if it's between the 21st and the 31st, it's the fourth Wednesday. If you get supplemental security uh payments, income from that, that's the first of the month. But here's the deal, if you're getting benefits based on your spouse's benefit, um, that is going to be based on their birthday, not yours. So just remember that. Now, here's the thing, most people do get their benefits deposited electronically in their bank accounts these days. Um, and that's usually by 9:00 a.m. on that Wednesday that you're designated for. If you do get a paper uh check, it you need to allow for three business days for that to get to you. But if you have a problem, Brad, there are things you can do. You should call the 800 number if it's more than three days late, call the social the 800 number. You can go to your local Social Security office. You can go to your my Social Security account online and see what's happening. I definitely recommend if you don't do direct deposit, do it, uh, if it's at all possible. That's the safest way to get make sure you're paid on time. Um, make sure the bank has all and Social Security has your accurate bank account information and your address. And you can even sign up from alerts from Social Security that they will ding you whenever that payment has been deposited.

Kerry, another story that you're following here, credit card debt is getting in the way of saving for many workers nearing retirement. What are you hearing on that front?

Yeah, Brad. This has been a problem that's been steadily growing and and it's concerning. Um, nearly half of those 50 plus are carrying credit card debt from month to month and this is from a study by AARP. And what's troubling about that is that with interest rates, credit card interest rates are, you know, topping 21%. This is really onerous and super hard to get out of if you start accumulating these interest charges. It's very difficult to get out from under that. And as a result, people have been pulling back on saving uh often. I'm not saying everyone is, but often pull back from saving for retirement. They say, I can't. I'm trying to pay down this debt or they're taking, we've seen an uptick in people taking uh loans from their 401k plans, which isn't a horrible thing in the sense that you're paying down debt and you are going to repay yourself. You're missing out on on other things during that time, but it is is one solution. But the the other one is people are are actually raiding their accounts and withdrawing for hardship withdrawals to pay some of these debt expenses. And and that, if you're under 59 and a half, you're paying the 10% penalty, you're paying tax on that. And so that's something we we really like to to shy away from. So I think that one of the big drivers though, I will add is medical costs and people say it's unexpected expenses that's putting them in the situation. And if for people over 65, I'm just going to note this one number I just saw that one in 10 uh people over 65 with healthcare debt have, they owe more than $10,000. I mean, this is this is something that a lot of people are grappling with, Brad.

So what are some strategies that people can use to cut both their credit card and their overall debt?

Yeah. So number one, you've got to face it, right? Face the music, do the numbers. Really don't stuff those bills away. Look at them and find out what what your situation is. So number one, uh know what your situation, your picture is. Number two, if it's credit card debt, pick up the phone and call your credit card insurer. This isn't a guarantee, but you can often negotiate with them to lower your rate. And this is particularly if you've been a good, someone who's paid regularly on time, you've been a customer of them for for a period of time. So it's worth a shot to see if you can get them to lower your interest rate there. The second thing is to look for balance transfer cards, which these are credit cards that have a 0% balance for say 21 months. Uh and that you pay a small fee of 3% perhaps to switch that to this card. But it's a very good way to give yourself some breathing room to start whittling down some of that debt during that period of debt of interest rate relief. Um, another thing I encourage people do automatic payments so you don't get, you don't miss a payment and you don't uh pay late and these cause extra fees and charges. So that's a great way to get control of it. Um, and again, there are two methods to how people like to pay down debt and one is called the snowball effect, which is, you know, you basically start with your smaller debt and you move up until you get through them. And psychologically, that can be a nice way to feel like you're accomplishing something. The other way is the avalanche method and that's starting with the highest interest rate and whittling down from there. And I personally think that's the best way because you're getting rid of that high interest uh interest first if you can do that. Um, some other tips are you could get a personal loan from a bank, but again, those can be eight around 8% to 12%, but you have to have a pretty good credit rating. But that's one way in order to consolidate some of your debts, pull them all together and have a three-year loan that helps you pay them off. And finally, uh you can turn to a credit counseling um agency, a non-profit one to help you in the sense that they will go negotiate with some of those lenders for you. Um, and and the Justice Department uh has a list of some of those they approve, but that's one method. But I think the most important thing is to take control, to face your debt and try really hard to start tackling it now.

Kerry, thanks so much for breaking all this down. Appreciate it.