How Credit Card Debt Relief Works

Are you feeling stuck on your way out of debt despite your sincere efforts to get out? Chances are you are experiencing overwhelming debt, and you’ve possibly maxed out all your credit cards.

All four types of credits cards are considered revolving debts, meaning they allow you to carry the balance from one month to another and repay the loan over a prolonged period.

The average American credit card debt stands at $5,525. This figure is expected to rise, prompting the need for Americans to consider a credit card relief program. 

Here’s how credit card debt relief works.

Common Types of Debt Relief Programs

The two most common types of debt relief programs are debt consolidation and debt settlement. On the one hand, debt consolidation programs pay back every penny you owe to the creditors to avoid credit damage.

With consolidation, the primary objective is to minimize or eliminate attached fees and interest rates. As such, you can comfortably get out of debt faster since your focus will be mainly on offsetting the principal debt.

On the other hand, debt settlement programs aim to get you out of your debts, having paid the least amount possible. As such, you get out of debt by paying a fraction of what you owe the company. When settling, fees and interest charges are major factors since the goal is to clear a percentage of your principal debt. You can learn more about that option at the Freedom Debt Relief site. 

Other options for debt relief include:

  • Deferment
  • Forbearance
  • Refinancing
  • Loan Modification
  • Consolidation
  • Voluntary surrender
  • Settlement agreements
  • Bankruptcy.

Credit Card Relief Programs

There are multiple types of debts, each with a corresponding ideal program for debt relief. While most credit card users might try a DIY solution before opting for professional solutions, high credit card debts can make it virtually impossible to get out of debt yourself. Credit card debt relief programs typically include debt consolidation and debt settlement.

Credit Card Debt Relief Options

Whether doing it alone or with the help of a credit card debt relief expert, below are ways to help you get credit card debt relief.

  • Credit card balance transfer

Different credit card companies have varying interest rates. Most people with overwhelming credit card debts typically accrue extremely high-interest charges. You can choose to get a credit card that charges no interest for a limited grace period. Consequently, you can transfer all your existing credit card debts to this new card to reduce your load.

  • Borrow from home equity

If your home has substantial equity in it, and you can refinance and borrow some cash to offset some or all your growing credit card debts. Unfortunately, this method puts your home at high risk. A credit counselor can help you come up with better solutions.

  • Debt snowballing

This involves taking care of low-balance debts before heading to the huge sums. While most debtors try to clear the large balances first, this strategy effectively boosts your motivation to clear off even larger ones.

  • Talk with your credit card company

Often referred to as debt settlement, this approach reduces how much you repay – a one-time payment in full — the credit card companies. With the help of a debt relief expert, you can negotiate with the credit card companies on the possibility of reducing or waiving your accrued interest rates or fees.

With the average American credit card debt standing at $5,525 and rising, credit companies understand the importance of client satisfaction to guarantee repeat customers. As such, they may not risk listening to your request for fear of losing you to their competitors. You stand a high chance of getting card relief if you approach the company voluntarily and with the help of an expert debt relief professional.

Bottom Line

If you suddenly feel overwhelmed with credit card debt, perhaps it is the right time to discover how credit card debt relief programs work. There are several options to help you offset your credit card debts. However, it is advisable to consult a debt relief company to guide you appropriately for maximum effectiveness.

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