When you have too much credit card debt, you only have a few options.
Here are 3 options for credit card debt relief:
#1 Debt Management or what is commonly referred to as Credit Counseling
The credit card industry makes billions of dollars loaning us money to purchase things with credit versus using cash.
You can get several types of credit card interest calculator programs on line, but I found a good one at ZilchWorks.
You will be shocked to see how much interest and fees you really pay on your credit cards!
For example...
Let's say you have a Visa Card with a balance of $2,500 at an annual percentage rate of 21%.
How long (and how much) do you think you will repay if you make the minimum payments until the balance is fully paid?
I know it is hard to believe, but you could end up paying back anywhere from 4 to 5 times the original amount you borrowed!
If your one of the 7 out of 10 people in the US that has a credit card balance, and are only able to make the minimum payments each month, you should consider a DEBT MANAGEMENT PROGRAM.
In a DEBT MANAGEMENT PROGRAM, you will have:
- ONE MONTHLY PAYMENT
- REDUCED INTEREST RATES
- WAIVED LATE and/or OVER THE LIMIT FEES
Most Debt Management Programs take about 4 - 5 years to complete, and the consumer will not only be DEBT FREE, but save thousands of dollars in interest and fees.
Does a Debt Management Program hurt you credit score?
Common question, but the answer is not just a simple "yes" or "no".
There are many factors that go into determining a credit score and I've written several blogs over the last few years. Go to "What Determines My Credit Score" for more information.
But for now, the best answer is "no" because with too much credit, your credit score most likely has already been damaged.
The only way to improve your credit score is to start paying off those debts and a Debt Management Program may be the way to go for you.
But, not everyone can qualify for a Debt Management Program. If that is your situation, then you should strongly consider a DEBT SETTLEMENT PROGRAM.
#2 Debt Settlement Program
Features of a Debt Settlement Program:
- Have ONE MONTHLY PAYMENT (that will fit your current budget)
- Each of your debt will be negotiated at a balance that is approximately 50% of the current balance.
- A QUALIFIED, PROFESSIONAL Debt Settlement Company will explain all of the pros and cons of a Debt Management Program.
There has been a lot of good and bad press written about Debt Settlement Companies.
Here are 3 tips on choosing a good Debt Settlement Company:
1) Check with the Better Business Bureau. It is not important that the company be an "accredited" company with the BBB. The BBB charges a fee (no, the BBB is not a government agency but a "for profit" company. What you are looking for is the rating (A+) and complaints. Stay away from "shady" companies!
2) Are they registered with the state? Not all states require registration, but if your state does, DO NOT choose a company that is not on the state's list of registered Debt Settlement/Management companies.
3) When you call the company, are you connected with someone you can understand and that seems to be more interested in you than just "signing you up"? A good Debt Settlement Company will offer a FREE CONSULTATION WITH NO OBLIGATION. Don't let anyone or any company pressure you into making a quick decision!
If you do not qualify for a Debt Management or Debt Settlement Program, then you may need to seek BANKRUPTCY PROTECTION.
#3 Bankruptcy Protection
Although the word "bankruptcy" brings up all kinds of sentiments and feelings, in some cases, it is not only the only choice, but could be the best choice!
If your financial situation is so dire that you cannot make payments towards your debts, then you must seek the counsel of a qualified attorney who specializes in bankruptcy.
He or she must offer an initial free consultation and demonstrate not only a professional but personal quality. If you would just like to get more information without making any commitment, then click on the button below:
