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Smart solutions for your troubling money issues

TODAY financial editor Jean Chatzky shares helpful advice on handling investments, consolidating loans, paying hospital bills and more.
/ Source: TODAY contributor

Need advice about paying off your debts? TODAY financial editor Jean Chatzky gives answers to the most common consumer debt questions.

Q: I'm a college student with a lot of credit card debt and I've also been recently diagnosed with Crohn's disease, which adds to my expenses. Would it be better for me to apply for a personal loan to consolidate my debt, or try credit counseling? I have also heard credit card counseling can bring down your credit score. Is this true? — Scott, Ware, Mass.

A: You're not the only person being dragged down by credit card debt right now. The question I have for you is: What's the interest rate on that consolidation loan? If that reduces the interest that you're currently paying to a point where you can swing the payments, I'd do that. Credit counseling does get noted on your credit report — it's not as much of a blemish as not paying your bills, but it's not something you want if you can avoid it. If the interest rate isn't low enough to make ends meet, then it's possible a credit counselor can negotiate the rates lower. So that would be my second option.

One final note: About one-third of people who take out consolidation loans go out and charge their cards right back up again. I don't want that to happen to you. Lock them in the freezer if you have to.

Q: I have about $8,000 in student loan debt and right now my interest rate is about 7.2 percent interest. Does it make sense to leave the loan as it is or to transfer that balance to a credit card with a 0 percent interest rate? — J.K, Topeka, Kans.

A: The goal of any loan is to pay as little in interest as possible — so here's the question: Would you be able to pay that credit card debt off before the 0 percent rate expires and jumps higher? And how are you at paying other bills? One late payment could send the interest rate shooting into the high 20 percent range. A better option may be to consolidate student loans if you haven't done so already. After July 1, student loan interest rates will fall more than 3 percent. Consolidation loans aren't as easy to come by as they once were, but you should be able to do better than the rate you have now, without extending the payments.

Q: I have several accounts in an investment bank — IRA, rollover 401(K), Roth IRA and a brokerage account. All investments for these accounts total more than $100,000. With the FDIC limit being $100,000, should I move an account to another investment bank?Jennifer, Tampa, Fla.

A: The FDIC insures deposits held in banks and savings associations. You say your money is in an "investment bank" —to me, that means brokerage firm. In that case you have SIPC (Securities Investor Protection Corporation) insurance instead. To the extent that your investments are in securities rather than cash, you have coverage of up to $500,000 for each account — not for all the accounts combined.

FDIC insurance applies when your money is in a bank or savings institution. In that case, Traditional and Roth IRA deposits together would be insured to a maximum of $250,000 per bank. If your 401(k) plan is self-directed (i.e., you manage the money), then it gets added to that $250,000 total. If it's not self-directed, you have insurance for up to $100,000.

Q: I have $10,000 in medical bills and we just found out our insurance company denied the claim for my gall bladder surgery. How do we figure out a way to pay these bills, without collection agents entering into the picture? — Noelle, West Memphis, Ark.

A: Start with the doctor who sent you to surgery in the first place. Explain the situation and see if this doctor will speak to the hospital on your behalf. Hospitals make money when doctors bring them patients, so they tend to listen when a doctor makes the call.

Also, know that hospitals sometimes have government money for people who don't have insurance. If you state your case — or if your doctor does — you may qualify for this assistance. Some call it a foundation, others a charity fund.

If that doesn't work, call the billing department and ask to speak to a supervisor, because often the person who answers the phone is a roadblock and won't help you. Do this right away — within 30 days, as soon as possible, so they know you're being proactive — and ask if you can work out a payment plan or get a discount if you pay in cash. Nine times out of ten, they'll work with you because if they were to hire an attorney and seek collection, the attorney would take a cut of almost 50 percent, plus it's a hassle that they just don't need. They want to help you, so ask if you can pay half of the total amount owed in cash and settle it. It's all about negotiation. Tell them what you can afford to pay, explain the situation, and see what you can work out.

Finally, you may also want to speak to a person called a patient advocate. They can be helpful with coming up with the necessary resources.

The most important thing is to be open and honest from day one. If you start letting it go, it looks bad and the hospital thinks you're trying to get out of it. Document all of your efforts and communications so you have it all in one place.

Couldn't get your questions answered here or on-air? To locate the nearest National Foundation for Credit Counseling (NFCC) agency near you, call 800-388-2227, or visit their Web site at Additional resources can be found at

Jean Chatzky is an editor-at-large at Money Magazine and serves as AOL’s official Money Coach. She is the personal finance editor for NBC’s TODAY Show and is also a columnist for Life Magazine. She is the author of four books, including 2004’s “Pay it Down! From Debt to Wealth on $10 a Day” (Portfolio). To find out more, visit her Web site, .