Debt relief is an umbrella term given to the various methods of reducing an individual’s overall debt. There are multiple relief options out there, including interest rate reductions, changes to loan and credit card repayment terms, debt consolidation, refinancing, and reducing the amount of principal owed.
While it’s great to know that so many debt relief avenues exist, it can be overwhelming figuring out which is right for you and your situation. Fear not – this article will guide you through what credit card debt relief programs do and give you an idea of which options could work for you.
Is Debt Relief Right For Me?
While credit card debt relief can be extremely helpful for many individuals struggling with the burden of debt, it’s important to understand that it isn’t for everyone in every situation.
Debt relief can be appropriate for the following situations:
- You’re behind on credit card bills
- You’re on the verge of being late for payments as you’re struggling to pay the required monthly amount
- You’ve tried to sort out your debt yourself but have fallen short
- You have thought about bankruptcy
Debt relief may not be appropriate for the following situations:
- You’re continuing to add to your current debt
- You aren’t committed to the long term journey of repaying your overall debt off
If you’re continuing to add to your overall debt, then it may be worth addressing your spending habits that are negatively impacting your finances each month. Deciding to get out of debt is a serious commitment, so it’s imperative that you have a clear idea of your finances beforehand before proceeding with any type of relief available.
Debt Relief Options
With so many debt relief options available, it can be hard to understand which works for you. Before you go making a hasty decision, here’s a breakdown of how credit card debt relief programs work. Once you understand how each method works, it will be much easier knowing which option is best for you.
Debt Settlement – Debt settlement with a company like Freedom Debt Relief (FDR) is designed to help get consumers out of debt at a reduced cost. Either you or FDR negotiates with your creditors to work out a settlement that’s less than the outstanding balance owed. While this sounds like a dream come true, it does come with consequences. There can be implications on your credit score and taxes, so it’s worth weighing up the overall end result before pursuing this avenue.
Credit Counselling – It can be really helpful having a trusted expert review your finances. Credit counselling involves meeting with a certified credit counsellor to explore your debt and finances. They will thoroughly analyze your spending habits and overall debt, and recommend a customized plan to help get you out of debt. This is a good debt relief strategy for those looking to manage their spending habits and overall debt, as some classic advice sometimes is all you need to get you back on track.
Debt Consolidation – Debt consolidation is when you combine all of your outstanding debts into a single debt, either by using a personal loan or a credit card. This is a great option for those struggling with multiple payment amounts and interest rates who find juggling multiple debts stressful. Having all of your debt under a single roof can be hugely helpful, not to mention the huge savings it can have if you get a low interest rate.
Get Out of Debt Today
If you’re looking to eradicate credit card debt as soon as possible, understanding what credit card debt relief programs do for you is instrumental to overcoming your situation. It’s important to be well versed in each option available to understand which method is right for you and your debt. Once you commit, you’ll be on the path to being debt free as soon as possible.