The average American's dependence on plastic money or credit cards is increasing steadily. According to the Federal Reserve estimates, credit card debt in the US as of July 2008 was as high as $962 billion. Since credit cards are a convenient source of credit and a perfect substitute for cash, people tend to use them indiscriminately. This inevitably leads to a difficult, sometimes irreparable, credit standing. An individual must consider a relevant credit card debt relief alternative, when faced with such a situation.
Credit Card Debt Relief: Options
Debt settlement and debt consolidation are the most commonly used credit card debt relief options. The suitability of these alternatives varies from debtor to debtor, and each alternative has its own pros and cons.
Debt Settlement
This involves negotiating with the existing lenders for lowering the loan outstanding, resulting in writing off a part of your credit. Approaching your lender through a reliable debt relief company may enable you to lower your existing loan amount by as much as 40 to 60 percent. This alternative provides instant financial relief to your monthly budget, besides enabling you to pay-off the exiting debt faster and build a better credit record from scratch.
Before applying for a debt settlement, you must take into consideration the limitations associated with this form of credit card debt relief. The biggest downside being a debt settlement is generally viewed as a foreclosure, and may result in lowering your credit score. Besides, a loan write-off is perceived as income or cash gift, and is therefore subject to federal income tax laws.
Debt Consolidation
This form of credit card debt relief involves merging multiple credit card accounts into a single line of credit. This helps to manage debt more effectively, since you only have to worry about meeting a single monthly payment, rather than making several payments to multiple lenders. Typically, debt consolidation enables one to stretch payments to a longer duration and lock-in a lower and/or fixed interest rate. This helps to lower the monthly credit card payment obligations considerably.
Debt consolidation does not impact your credit score and nor does it have any tax implications. Nonetheless, you must bear in mind that to benefit from debt consolidation, you will most likely have to pledge your home or car as collateral. This may result in repossession of the asset, should you default on payments towards the consolidated loan account.
To learn more about your credit card debt relief options, log on to www.superiordebtrelief.com. You may also contact Superior Debt Relief Services Inc personally, the contact details for which are given on the website, to assist you in negotiations with your lenders. Its expert team of professionals has wide experience in negotiation various types of debt relief plans.
Debt Settlement can reduce your credit card debt by more than 50% with the help of our credit card debt relief program.
What is a good debt relief company?
I just graduated school and racked up $8,000 in credit card debt. Luckily, I avoided the whole student loan mess, but I really need to get control over this lingering debts. I have heard good and bad things about debt relief companies. So i was just wondering is someone could direct me in finding a legit company. Also, any info on debt relief is much appreciated.
Answer
Debit relief companies do nothing for you that you cannot do yourself and you have to pay them to help.
1. Cut up the credit card. You obviously cannot handle having one yet.
2. Sit down and figure what you have coming in versus what goes out into your monthly bills.
3. Take the extra money you have and begin paying it on the credit card.
4. Consider a second job - part-time or full in which that money will be strictly used for paying off the credit card.
You can also consider a personal loan from you bank (if you qualify) for what you owe on the CC. The personal loan percentage will be easier on you than the CC will be. Have the monthly payment pulled directly from your account and you can even save half-a-percent or more on the deal.
But cut up the card. As long as it's active you will be tempted to charge on it when there is something you want and don't have the cash for. No cash - no purchase.
Good luck.
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