Even as the national economy has continued to improve over the last year, many consumers across the country are still mired in credit card debt they were forced to take on during the depths of the recent recession.
Stagnant unemployment figures and limited incomes have led many consumers to rely more and more on their credit card accounts for everyday purchases and necessities to make ends meet. This can result in mountains of debt that some may find to be completely unmanageable even if their finances have improved somewhat in recent months.
For those consumers, finding credit card debt help may not seem like the easiest prospect. However, those who are struggling less than others may simply be able to find relief on their own. By carefully examining all aspects of their finances to find out how much they take in, save and spend each month, they may be able to identify areas where they’re putting too much money into unnecessary purchases or services. By cutting these out, they may be able to save as much as $100 or more per month, and by putting that toward their outstanding debts, more quickly free themselves from these oppressive balances.
But a number of other options for getting out of credit card debt also exist for those in more dire straits. These options can include debt consolidation and debt settlement. However, neither of these options should be entered into without first consulting a credit counseling agency.
With the help of such an organization, consumers will be put in touch with a financial professional who is well versed in helping troubled clients get out from under their massive credit card debt in a way that makes sense for their personal situation. Often, a counselor will work to help consumers better understand the reasons they ended up so deeply in debt, and ways they can get out of it before resorting to more drastic measures.
However, if their advice alone is not enough to help their clients emerge from credit card debt, they will also assist in getting them help through debt consolidation or debt settlement. Through the former option, consumers will receive a loan large enough to pay off all their debts at once, essentially reducing their number of lenders to just one. These lines of credit can even come with lower interest rates than some of their previous accounts, which can make the balance even easier to pay off if it’s approached properly.
Debt settlement, on the other hand, is a process that allows consumers to reduce their balances by as much as 60 percent in some cases. By negotiating with their lenders through their credit counseling services, consumers may be able to strike a deal that will significantly reduce the amount they owe in exchange for paying off the remaining, unforgiven debt in one large lump sum. However, because this amount can be so high, it will often require consumers to save up for several months beforehand, and even then, it may be difficult to afford. As a result, this is not a process that borrowers should enter into lightly.
Consumers who are worried about sinking more deeply into credit card debt should first make efforts to pay more than the minimum required on their monthly bills so that their interest payments don’t add up too quickly. Making on-time payments will also help consumers to avoid high penalty interest rates and other late fees that can further add to their debt problems.