Do you find yourself caught in the midst of credit card debt? Have you been wondering if there is a way to clear your mounting debt without getting trapped in a debt trap and without letting too much interest get accrued on your credit card? If you are looking for credit card debt relief, you are not alone. Many people in the US now find themselves in this situation and some of the options that they consider for credit card debt relief are Credit Card Balance Transfer, Credit Card Debt Consolidation, Credit Counseling and Credit Card Debt Settlement. If nothing works out, filing for bankruptcy may also be considered as a last resort.

It is important to note that no one solution is best for everyone. Depending on your specific financial situation, you may like to review the options mentioned above to find the cc debt relief solution that is best suited to your needs.

Credit Card Balance Transfer

If you own more than one credit card, a balance transfer can be an option that you may like to consider to consolidate your debts. By using a balance transfer credit card, you can consolidate all of your bills onto just one card. You may have to commit to paying more than the minimum amount on the new combined balance. It is advisable that you total up all of the minimum payments on your previous debts and add an additional amount that you can comfortably free up from your budget. The only thing that you would then need is enough discipline to pay that entire amount to the new balance every month and you would be on your way to debt freedom.

Credit Card Debt Consolidation

If the extent of debt that you owe is large, you may like to consider a debt consolidation loan. While going for these loans, you can choose from the two available options- personal loan or a home equity loan. If you don’t own a home or your home doesn’t have sufficient equity, then you may go for a personal debt consolidation loan. While interest rates are generally higher on these loans compared to home loans, they may be lower than credit card rates and you may be able to reduce your interest burden through these loans. Alternatively, if you have a home with sufficient equity, you may qualify for a home equity loan. These loans generally have lower interest rates and additionally the interest may be tax deductible. It is advisable that you do thorough research and get professional credit foreclosure advice before you make your choice.

Credit Counseling

It may also sometimes be worthwhile to contact a local credit counseling service to help you in paying off your credit card debts. The benefit of opting for this option is that this service can review your debts, income, and expenses, and work with you to create a payment plan. They can even negotiate with your creditors to reduce your interest rates and set a fixed monthly payment. You would need to make a single monthly payment to the service, which would then distribute it to your creditors as agreed. But you may need to keep in mind that once you are enrolled in the program, you would no longer have access to your cards and therefore, you would not be able to create new debt. This can actually serve as a blessing in disguise to you and you may actually end up reducing your debts faster than you had thought.

Credit Card Debt Settlement

If the extent of debt that you owe is significantly high, your credit counseling service may recommend debt settlement for you. The service would contact your creditors to negotiate a new lower balance and a new payment plan. You may either be required to make a lump sum payment or monthly payments. The advantage of debt settlement is that in most cases debts can be reduced by up to 40%. But on the other hand, it is important to note that by going in for this option you may end up seriously damaging your credit and additionally you may owe taxes on the unpaid amount.

Bankruptcy
If nothing works, you may choose to file for bankruptcy as a last resort. While it may be extremely difficult to eliminate credit card debts when you file for bankruptcy, if you have other debts such as high medical bills that prevent you from paying your credit card bills, bankruptcy may be an option.

Before choosing any one credit card debt relief option, it is advisable that you consider the impact of all of the options on your budget and financial future. While personal financial discipline can always be the best solution to reduce your expenses and pay off your outstanding debt, you may wish to consider the other options if paying your debts is simply impossible.

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Category: Finances
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