Living under a cloud of debt just isn’t any fun. In fact, it can ruin your entire life–both physically and emotionally. The stresses caused by trying to cope with debt can actually make you sick. They could cause you to develop ulcers or even heart problems. For that matter, we know of couples who have ended up divorcing because they were unable to agree about how they should handle their debt.
The ostrich program for credit card debt management
This is where you basically stick your head in the sand and hope your credit card debt problems just go away. Of course, they don’t. A version of this is to develop a budget, tighten your spending, make more than the minimum payments on your credit cards each month and hope you’ll be able to eventually work you way out of debt. However, if you’re really, really in debt, this could take as many as twenty years. You can check with any debt calculator and see how long it would take to pay off your debt at 20, 25 or 30% interest rates.
Consumer credit counseling
Maybe consumer credit counseling could help. There’s probably one of these agencies in your area. They are usually nonprofits and will work with you at little to no cost. This is because they are supported by lenders such as banks and credit card companies. If you choose this type of credit card debt program, a counselor will work with you to develop a debt management plan (DMP) then negotiate with your creditors to get them to accept it. Your credit counselor will probably also negotiate to have your interest rates reduced so that you can handle your accounts better.
Once your creditors all sign off on your debt management plan, you will make a payment each month to the consumer credit counseling agency. It will then pay all your creditors. However, all your accounts will be closed meaning that you will lose all your credit cards. In addition, this may have a negative effect on your credit score.
Look before you leap
Be sure to check out a credit counseling agency before you sign up,. This is especially true if you choose an online credit counseling company. There are some real bandits on the Internet who will take your money but never pay your creditors–leaving you in worse shape then when you started. Check with the Better Business Bureau (BBB) or the National Foundation for Credit Counseling (NFCC) to make sure the agency is legitimate before you sign with it.
Would a debt consolidation loan help?
Have you thought about getting a debt consolidation loan? It’s a credit card debt program that has helped many people. The way this works is that you simply borrow enough money to pay off our creditors all once. This will get them off your back and should get you a lower interest rate. You will have more time to pay off the loan–as long as 7 to 10 years–vs. the three or four years that might be required to pay off your credit card debts. Another plus of a debt consolidation loan is that you will be making just one payment a month to your lender, instead of the dozen or so you may be making now. This should also boost your credit rating because you won’t have any more late or missed payments.
The one downside to a debt consolidation loan is that it does nothing to reduce your debt. It just basically moves it from one set of creditors to another lender. You will pay the entire amount you owe plus interest. Many financial gurus say you cannot get out of debt by going further into debt and we would have to agree.
True debt relief
There is one credit card debt program that can get you true debt relief. It is called debt settlement, also known as debt negotiation or debt arbitration and it is what we recommend. When you put us to work, we will recommend a debt relief company who will negotiate with your creditors to settle your debts, usually for a fraction of what you owe. They don’t charge you a single cent until they have settled all your debts to your satisfaction. And if you are unsatisfied with our recommended programs for any reason, you can cancel with no fees or penalties.