Americans have almost a trillion dollars worth of credit card debt. Credit card debt can feel insurmountable, especially as the interest piles up. Whether you use your credit for emergency expenses like medical bills or consumer spending, it is in your best interest to pay off the debt as soon as possible. It may not feel like it, but you can get out of a vicious credit card debt cycle.
The following are credit card debt relief options to consider:
Contact The Creditors
The first step you should take is to talk to your credit card lender. Reach out to the lender via phone or email and ask them if they can work with you.
In some cases, they may be willing to make certain concessions like reducing your interest rate, waiving various fees, or changing your monthly payment date. Ask them about anything they can do to make it easier for you to pay back the debt.
Your negotiation skills will have to be at their best for the lender to give you more favorable terms. However, if it works, you can get excellent terms, but be prepared for the worst.
Credit Card Balance Transfer
Another credit card debt relief option is to consolidate your credit card loan with a balance transfer. It is an option that has the benefit of reducing your interest and principal payments with minimal effect on your credit. The drawback is that you need an excellent credit rating to qualify for the transfer.
A credit card balance transfer works by allowing you to transfer all your credit card balances to a new credit card account with a lower interest rate. You can even find a credit card with a promotional period of more than a year where the total Annual Percentage Rate (APR) is zero.
However, the interest rate will rise dramatically after the promotion period. Therefore, you should pay as much of the credit card balance until the promotion period ends. If you utilize it properly, you can significantly reduce your credit card debt.
Debt Consolidation Plan
Debt consolidation or settlement involves rolling up all your debts into one so you can streamline your debt payments. You find a lender that offers the best interest rate and terms depending on your credit score. You should note that you must meet credit score requirements to qualify for the loan.
You then get a personal loan and use it to pay all your other debts. After making the one-time payment to pay off your credit card debt, you will pay back the personal loan in monthly installments.
A debt consolidation plan is one of the debt solutions that must work for your particular case. The debt amount will not be less in a debt consolidation plan. However, you get favorable terms to pay off the personal loan.
Debt Settlement Program
A debt settlement program involves contacting debt resolution services to help you with the payment. The service is a third party that negotiates with your lender(s) on your behalf.
The service will typically convince the lender(s) to accept a portion of the debt instead of writing it off and ruining your credit rating. Bankruptcy will obliterate your credit status, so a debt settlement program offers a short-term reprieve.
The program will damage your credit score in the short run. However, after a few years of paying back all your debts, your credit rating and financial status will be in good standing.
Credit Card Debt Relief Is Possible
If you are feeling overwhelmed by credit card debt, don't worry. Credit card debt relief is possible, and many before you have successfully done it. The above are credit card debt relief options to consider. They may damage your credit in the short term but are significantly beneficial in the long run.
