Steps to Take for Credit Card Debt Relief
When your debt gets to a point where you feel like you can’t pay it back on your own in the normal way, it’s time to explore your options to find credit card debt relief. Debt relief allows you to pay your debts back in-full to avoid any financially damaging options, such as debt settlement and bankruptcy. You put your finances back on track and your debts back to a point where you can manage them easily within your normal monthly budget.
If you feel like your credit card debt is out of control, don’t wait to find the debt relief solution you need. Consolidated Credit’s trained credit counsellors can evaluate your budget and debts, free of charge, to help you determine which debt relief option is right for you. If you need debt relief, give us a call at 1-888-287-8506 to speak with a counsellor today or get started online with a Free Debt Analysis.
What are my options for debt relief?
Debt relief includes any debt solution that allows you to make your credit card payments more manageable for your monthly budget. In some cases, you can find debt relief simply by negotiating with creditors to lower your interest rates. With a lower interest rate, credit card debt doesn’t build up as fast and the calculated minimum monthly payment may be less as well.
In many cases however, simply changing your interest rate doesn’t provide enough of an impact on improving your financial situation each month. In this case, you need to find a way to reduce your total monthly debt payments so you’re not spending so much of your monthly budget to pay back your debts. You still pay your debts back in-full, but you do it in a way that works better for your budget.
Here are the most common ways to find relief from your credit card debts if debt negotiation isn’t enough:
- Balance Transfers. If your credit card debt hasn’t yet affected your credit scores and you have a strong enough credit rating, you may be able to find debt relief simply by transferring the balances from one or more of your high interest credit cards to a credit card with a much lower interest rate—ideally, a 0% APR credit card which allows you at least a period of time to pay off your debts at 0% interest. You need to have a strong credit rating to qualify for a good card and be aware there may be certain fees and/or a balance transfer APR applied to the transactions. Always check your credit card contract before you make any type of special transaction to make sure you won’t be overcharged.
- Debt consolidation loans. Like balance transfers, debt consolidation loans are do-it-yourself debt relief. You consolidate multiple unsecured debts, such as credit cards and even medical bills into a single monthly payment. You can obtain an unsecured debt consolidation loan, assuming you have a high enough credit score to get a good interest rate. You may also qualify for a secured debt consolidation loan, such as a home equity loan. While a secured loan offers you a better interest rate, the danger is you risk losing your home if you fall behind on your payments. You put your house at risk just to pay down your credit cards.
- Debt management programs. A debt management program is another debt consolidation option you can use to combine your debts into one low monthly payment. You enroll in a debt management program through a credit counselling agency who acts as a go-between for you and your creditors. Since the credit counselling agency is representing you, the interest rate applied to your debt isn’t based on your credit rating. You can qualify for a debt management program even with bad credit.
Choosing the right debt relief option
Which debt relief option you choose is largely based on your own unique financial situation. A number of factors will go into determining if you qualify for certain debt relief options and which option will provide the most benefit to you in paying off your debts.
Here are some the factors to consider as you choose your debt relief solution:
- How much unsecured debt do you have?
- What types of unsecured debt do you have—i.e. credit cards, medical bills, other unsecured lines of credit?
- Have you been late or missed payments on your debt?
- If so, and the accounts are delinquent, how long have they been that way?
- What is your credit rating?
- Do you currently have a steady monthly income and if so, how much?
If you need help deciding which debt relief option is the right choice for your finances, call us at 1-888-287-8506 to speak with a trained credit counsellor. They can provide you with a free personalized budget consultation to assess your debt and decide on the best option for debt relief. Since the consultation is free, you can receive the advice you need without adding another bill. You can also get started online with a Free Debt Analysis.
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