According to USA Today, [1] the Americans have an average of $6,354 debt on their credit cards. Many of them manage to pay off their balance each month, but 60% of people struggle and often end up paying large amounts in interest while lowering their credit score.
However, you can use a debt relief program to get rid of your credit card debt in two to four years. Even better, you could wipe your debt and spend less than what you officially owe. Here’s what to do and what do avoid when looking at your debt-relief options.
Stay Away from Debt Consolidation Loans
Most people struggling with credit card debt end up getting a debt consolidation loan. This option is very tempting simply because companies promise that you’ll get a lower interest rate and only one monthly payment to service all your credit cards.
Unfortunately, the people advertising debt consolidation loans are lenders that want to make money off of your financial problems. Although it might not seem like that at first, trust us, these companies will expect and want you to pay them more money than what is your total debt owed.
According to Lifehacker, [2] debt consolidation loans most often come with longer terms that cost more in the long run. Simply put, this kind of loan can easily cost you more than your current debt because you end up paying a lower interest rate for a longer period of time.
Worse yet, only people with good credit can get these debt consolidations loans. If you have fair or poor credit, you probably won’t be eligible. Besides, even if you get approved, chances are that you’ll see your debt grow each month.
There Are Other Solutions to Credit Card Debt
Luckily for everyone in a financial bind, there are more options to consider if you need to pay off a credit card debt. Debt relief companies let you come up with a repayment plan that’s realistic.
Debt relief companies know you can always negotiate and that’s how they help you reach a debt settlement. Debt settlement involves offering a single large payment that can help you get the rest of your debt forgiven. Credit card companies are actually open to this because it prevents you from paying the bare minimum each month for years to come. You can also save your credit score and avoid bankruptcy.
When working with a debt relief company, your credit card company will most likely agree to take less than the full amount owed, and they won’t be able to demand additional money afterwards. By giving a lump sum, you can solve your financial problems and get rid of persistent credit card debt while saving hundreds or even thousands of dollars.
The Right Debt Settlement Company Can Solve Your Problems
Finding the best debt relief company will help you lower your credit card debt and pay it off in one move. Each debt relief company will negotiate and fight for you.
However, before jumping in, you have to research to find the best debt settlement companies. Find and compare at least a couple of offers before making a choice . A free consultation is often available and the perfect chance to find out just how much you could save with a particular company.
[2] https://lifehacker.com/5973715/should-i-get-a-debt-consolidation-loan-to-pay-off-my-credit-cards