Which credit card debt reduction plan will work out for you?
As is well known this past year has been one of the most stressful in terms of economic troubles. This recession has forced millions of US residents into extremely dangerous financial situations. It looks like almost everything that could go wrong did go wrong. We are witnessing record numbers in houses getting foreclosed upon, the unemployment rate is soaring, and to add insult to injury unsecured credit card debt has reached an all time high. These problems are leaving consumers to search for a workable method of credit card debt relief to aide them in getting back on their feet. There are two main forms of debt relief that individuals have been using, and they are debt settlement and credit counseling.
Credit counseling is a plan offered and run by the credit card companies. The benefits of using a program like this are to have your bills consolidated into one monthly payment and to have the APR reduced. This isn’t a true system of debt reduction because the balance itself is not actually reduced, just the APR. The negative aspects to this plan are that the payments often times are not much less than the payments a consumer was making to start with. And what most people don’t know is if you fall behind on just a single payment you will forfeit the advantages of the plan and be withdrawn.
Debt settlement is a much different form of credit card debt reduction. When using a credit card debt settlement plan the advantages are saving money and valuable time. In many situations the debtor will save in excess of 50% of what they previously owed and find themselves out of credit card debt in just a few years. Now there is a negative aspect to debt settlement and that is the client must fall behind on the monthly payments for the creditors to be willing to work out a settlement. So obviously your FICO rating will drop down when you begin this process. But after the settlements start getting made the credit rating will rebound and go back up.
These two types of programs will not be workable for all. Which program is right for you depends on your individual financial state of affairs. I would say look into both options and research which can help you more in your situation.
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- How To Eliminate Credit Card Debt
- How To Eliminate Your Your Credit Card Debt
- Credit Card Debt Consolidation In Today’s Credit Crazy World
- What is are Credit Reduction Services?
Tags: Credit Card Debt, debt reduction, Debt Relief, debt settlement