Many people are having a hard time making their minimum credit card payments these days. With the downturn in the economy, millions of people have lost their jobs and making every dollar stretch can be exhausting and stressful. The average American family has at least three credit cards and credit card debt in excess of $10,000. Coping with making multiple monthly payments and paying all the other bills when you simply no longer have enough money can be overwhelming. However, take heart, there are debt solutions available and you can find your way to credit card debt freedom.
One approach to resolving credit card debt is debt settlement. Debt settlement is a process of negotiating an agreement with your credit card company to accept a reduced amount of money in settlement of your credit card account. Reductions may include elimination of accumulated fees, reduced or eliminated interest rates, reductions in the amount of principal balance you owe or a lump sum payment.
Many consumers believe they can perform debt settlement negotiations on their own. However, it is a time consuming and, often, frustrating process. You need to call your credit card company many, many times and may find yourself accomplishing little or nothing in the process. Most customer service agents do not have decision-making authority and cannot offer you help reducing your credit card debt.
Additionally, most credit card companies do not willingly accept settlement agreements from cardholders. They may offer temporary hardship programs for a few months. However, rarely do these programs offer reductions in fees, interest rates or balances.
Debt settlement and negotiation with a professional credit counseling organization is usually a much better option if you truly want credit card debt freedom. A professional debt relief counselor is specifically trained in debt settlement negotiation. They are able to skillfully navigate credit card company payment departments and will work on your behalf to reach an agreement that is within your ability to pay. In most cases, a professional credit counselor can reduce your credit card debt obligation by up to 50 percent.
With a negotiated debt settlement, debt consolidation may be the next step on the road to freedom from credit card debt. Although many organizations recommend debt consolidation loans, there are far better options that do not add back to your indebtedness. At DebtConsolidation, we offer a debt consolidation program that allows you to manage your credit card debts in a productive and positive manner.
Instead of taking a loan, our debt consolidation program is all about managing your money. We open an account for you to make a single monthly payment to each month. This amount is a consolidation of all of your credit card debt obligations. However, instead of juggling several payments, you are now paying one lower payment each month. In turn, we make payments to all of your credit card accounts, ensuring that payments are not missed and are paid on time. This process improves your credit rate over time and actually helps repair your credit.
Bankruptcy is considered the credit card debt solution of last resort. What many people do not realize is that a bankruptcy can stay on your credit report for up to 10 years. Although most of your debts are discharged, some debts, such as IRS liens, student loans and government loans cannot be discharged in a bankruptcy settlement. Additionally, with changes in bankruptcy laws, you must pay a portion of your debts to creditors unless you have extremely low or no income.
A bankruptcy can also influence more than your ability to get a mortgage or car loan. Almost all insurance companies now use credit reports as a factor in setting policy rates. Regardless of whether you are trying to buy car, rental, homeowners or life insurance, your rates will be dramatically higher when you buy insurance. Additionally, when your bankruptcy is discharged, your existing insurance policy premium rates will increase the next time your policy renews.
Bankruptcy can also influence your ability to get a job. More and more employers are running credit reports as a routine part of their applicant screening process. You may look like a great employee prospect and even have a terrific interview, but when they run your credit report and it shows a bankruptcy, you may automatically be taken out of the running. In today’s economy and with such high levels of competition for jobs, this may be reason enough to avoid a bankruptcy at all costs.
If you are drowning in credit card debt, the best solution may be to consult a professional credit counseling agency. Our credit counselors will provide you with an unbiased and honest evaluation of your debts and recommend the best approach to resolving your credit problems. Call us today or fill out the form on this page for your free debt analysis. We can help you with both personal and business credit card debts or any unsecured debts. Let us help you find the road to credit card debt freedom.