Eliminate Credit Card Debt

Americans have racked up enormous credit card debt. It's somewhere above two trillion dollars at the moment. That many zeroes is enough to frighten any consumer, and many are scrambling to eliminate credit card debt.

This is a prudent move too. The weakened economy does not look to be regaining as much ground as had been hoped six months ago, and even more job loss could result in the inability to make even minimum payments each month. The wise consumer is investigating available ways of reducing or completely eliminating unsecured debt, and there is much available today. But, it requires some research and some delving into the different programs and their benefits and liabilities.

Traditionally, consumers leaned toward debt consolidation packages. They were familiar and known entities. The only problem with them is that they usually require a loan to eliminate credit card debt, and that means obtaining a secured loan. and, a secured loan means either a second mortgage or a home equity loan. Should the consumer run into unforeseen bad circumstances in years to come, it could mean default and that could mean loss of home. For older consumers, a long term loan may not even be an option.

Bankruptcy remains the last option one should consider. It is a process that is costly both legally and emotionally. While its very concept is to give people a fresh start, new laws make it harder to use as way to eliminate credit card debt, and often the consumer will end up having to make some compensation to creditors. Additionally, it remains on a credit report for up to ten years, and that's a long time to wait to start rebuilding credit.

Debt settlement and debt management are two newer options that are becoming increasingly popular. Working through debt resolution companies, the consumer has professional negotiators work with creditors on their behalf. After paying monthly amounts into insured funds rather than continuing to make minimum payments on a number of accounts, the resolution company negotiates new principle balances with creditors. The payments are then made from the account the consumer has paid into. It is possible to eliminate credit card debt within twelve to thirty-six months, and with no need for a loan to do it. These programs have different requirements for use, but consumers should investigate whether it is an option they might use or not. Credit ratings will be somewhat effected during the process, but because the programs are shorter in duration, it means that rebuilding a good rating can start sooner.

Comments? Questions? Email Here

© HowtoAdvice.com

How to Advice .com