Credit Card Debt Relief

How to Obtain Credit Card Debt Relief

When you have credit card debt, it can quickly diminish your credibility and your credit rating. You won’t be able to get new loans, apply for new credit cards and sometimes, you’re not even able to open a new bank account. If you have a lot of plans for your future that require financing, you’re going to need to obtain credit card debt relief to get your financial life back in order. Luckily, there are credit card consolidation companies out there that you can go to for help. You can also use methods on your own to help diminish your credit card debt.

Why Choose Credit Card Debt Consolidation?

Although there are other methods for credit card debt relief, there is one that seems to be more popular for this form of debt – consolidation. By consolidating your credit card debt, you’ll be able to lower your interest rate, making it easier to pay off. When deciding whether this is a good credit card debt relief option for you, you should first look at the interest rates for all of your credit cards. Then find out what rate you’d be given if you chose to go with debt consolidation. Obviously, if the rate is lower than your credit cards’, then this may make sense for you. However, if you have some credit cards that are lower and some that are higher, you can include the higher interest rate credit cards for this debt relief method.

Other than getting a better interest rate for your credit card debt, people choose this option because it makes their lives easier. There’s only one bill to worry about, versus having to pay multiple creditors. With debt consolidation, you’ll have one low monthly payment to keep up with.

Where to Get Debt Consolidation

If you decide to get debt consolidation, you’ll need to go to a company or bank that offers this service. When looking for a debt consolidator, make sure to do your research to ensure that they are reputable and have a good success rate.

Debt Settlement as Credit Card Debt Relief

Another option to get rid of credit card debt is to go with debt settlement. Unlike with consolidation, you’ll be left to pay your creditors, but at a fraction of the balance. Say you owed $20,000 in credit card debt. You could have a debt settlement company negotiated with the creditor to have it lowered by 50% or more. Then you’ll be able to pay this off in one lump sum, using cash saved or another method.

How to Get Out of Credit Card Debt

Before deciding to get debt settlement assistance, you should know that it can have a negative effect on your credit rating. But if this is the only option, then you should take it so that you can take much needed steps to get out of debt.

In order to get debt settlement, you must have missed six or more months of your credit card payments (some people do this on purpose when they want to get debt settlement help). This means not even making minimum payments for the credit card. Just let the credit card company know you don’t have the money (you’ll likely be getting a lot of calls and letters from them).

If you decide to purposely miss the payments for six months, use this time to save money, so that when the time comes, you can negotiate a settlement that you’re able to offer right away. You can threaten to file for bankruptcy if they don’t agree to a settlement, in which case they won’t receive a dime. Most creditors will take a settlement offer when they know the consumer is on the verge of filing for bankruptcy.

Negotiating with Creditors

You can choose to do this all on your own or you can hire a debt settlement company to help you with the negotiation process. If you decide to do it yourself, gather the numbers of the creditors that you wish to settle your debts with and begin contacting them. You should start off with the higher balances, if you can afford it, and then work your way down (snowball debt). Or if it is more reasonable to work your way up by paying of the smaller debts first, then this can be done.

When dealing with credit card debt, you don’t have to go at it alone. There are various options that you can use to help you obtain debt relief.