Obtaining credit card debt relief is an option every consumer must consider if they are struggling to meet their financial obligations each month. This would not only help erase the burdens that come with being in debt, but it has the potential to save you lots of money along the way. It is impossible for me to say just how much money anyone can potentially save, as that will strictly depend on the type of credit consolidation program you choose and how much debt a person is currently in. Considering the state of our economy it is not surprising that more and more people are in need of help these days. For this article we will concentrate on credit counseling and debt settlement as a way for any consumer to receive the help they are looking for. Even though both of these methods will provide you with the credit card debt relief you are searching for, they are 2 very different methods of credit consolidation as far as there approach goes and therefore could have a different effect on your credit as well.
The first form of credit card debt relief we want to discuss is credit counseling. Basically using this type of a debt management plan you are making a commitment to all of your creditors that you will be making full restitution to the amount you owe. In return your creditors will lower your interest rates, waive fees and eliminate the penalties that have been piling up on your original debt. Using this type of credit consolidation will have some great benefits for you. With the lower interest rates and the waiving of fees and penalties your monthly payments will decrease. Keep in mind as well that since more of your money will be going directly to the principal of your debt you will be living a debt free life sooner than originally planned. There is something you will need to be made aware of though. Using this type of credit card debt relief may or may not be mentioned in your credit report. Even if it is, at least it will show your creditors that you are attempting to pay them everything you owe. The other important aspect that I need to mention is once you have successful joined a credit consolidation program you will need to stick with it. Make sure that you make your payments and that they are on time. If you should for any reason default on your agreement creditors may not permit you to continue on the plan and once again charge you the higher rates as before.
The other type of credit card debt relief we would like to discuss is debt settlement. Using this type of credit consolidation your creditors would actually be eliminating a portion of your debt. Your representative will use their expertise to negotiate with your creditors a fair and reasonable settlement that could actually save you up to 60% of the original debt. You may be wondering why they would be willing to do this. Actually it’s rather simple. After reviewing a person’s financial situation, sometimes its best to get a portion of the original debt rather than little or sometimes nothing at all. Keep in mind this to will affect your credit rating. Until settlement has been completed your score will suffer somewhat. Generally speaking once your debts have been reported as paid in full you will see an increase in your ratings once again.
If you decide that you do need some type of credit card debt relief make sure you fully understand all of your options before signing any type of agreement. Credit consolidation can give you the peace of mind you’re looking for but only if you do the proper research.
