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Benefits plans provide employees with benefits. Practical information is a benefit too, especially in areas like financial wellness. It is difficult for employees to save money when they struggle to make ends meet. One of the reasons some employees may be struggling is they have taken on debt. According to a new survey, 80% of employees have a problematic level of debt. This can be an opportunity for employers to share information through live seminars, video classes, training available online and face-to-face conversations.

Why is this important? There are lots of reasons, but a very timely one is the rising interest rate environment. When people run up charges on their credit cards and carry balances month to month, they are paying interest on the unpaid charges. The Fed Funds rate has risen to 4.50%, yet the average credit card interest rate is 16.27%. If you have "fair credit" the rate might be over 24%!

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How can you help employees by raising their awareness of the issue and pointing them in the right direction towards solutions? Here are seven ways to get employees to understand the importance of debt reduction:

1. Debt is like fat. According to the CDC, about 40% of Americans are obese. That is a sobering statistic but it makes the point that most people would like to lose a few pounds. Excess weight is easy to gain. You eat a lot when you are out with friends having a good time. Debt accumulates in much the same way. The amount of effort it takes to lose weight is far greater than the effort it took to put on those pounds. It works the same way with debt.
2. Cash is king. People run up debt when they pay with plastic. That cab can be very abstract, especially if you are going out with friends for a few drinks on Friday after work. According to Bon Appetit, inflation is driving up the price of cocktails. A martini might be costing you $18.  Consider taking cash out from the ATM and paying your bill in cash. Employees will have a much better idea what they are spending and when it is time to go home.
3. How much are they paying in credit card interest? How many cards do employees have? They might all have different interest rates. Be aware of how much you are paying. Everyone who invests wants to make money. Over decades, the stock market has had an historical annual return of about 10%. A credit card might be charging you 16% or more!  The easiest way to make 16% on your money is to pay off your card and stop paying them 16%.
4. Investigate balance transfers. Employees might be paying high rates on a few cards. One might offer a low introductory rate if you transfer in the outstanding balance you have on another credit card. This buys you some time to try paying down the balance. Make sure they're aware the "losing" credit card company might charge them a fee if they do a balance transfer.
5. Is another credit card company offering a lower rate? An employee might be paying high rates of interest, but another bank or credit card issuer might be looking to gain market share. They might be offering lower rates, at least on an introductory basis. Make sure thy know to check it out.
6. Charge card or credit card? Employees may like paying by card. It is easier than carrying cash. Some cards, like the classic American Express card are designed to be paid off at the end of every month. Advise them to consider a charge card if they can handle paying the balance in full every period. They will not be paying any interest.
7. Are they getting an annual bonus? Some employees are paid on the basis of salary plus bonus. That extra payment can be an ideal source of funds for reducing outstanding debt. Advise them to consider directing that windfall towards debt reduction. They do not know what next year's bonus might look like, but their debt is not going away unless they do something about it.

Related:  52% of American workers are struggling financially (only 10% are thriving)

One final suggestion for employees is to talk with their accountant. They may have other ideas for developing a strategy for reducing and eventually eliminating debt. If they help file their taxes, they see the big picture concerning their situation and are well positioned to offer advice.