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3 more ways to help eliminate credit card debt

[Nov 27, 2010.]

 

Credit card debt gone wrong can be expensive, and also very discouraging. Take a few minutes to make a plan for 2011. Start out the new year on a path to debt relief.

1. Credit card debt consolidation loan

If your credit score is still good, you should be able to get a credit card debt consolidation loan. This method of debt relief is the easiest on your credit score. You will be paying your credit card debt in full, which other lenders will be glad to see when they review your credit history.

A credit card debt consolidation loan combines your balances into one monthly payment, usually with a set term and a low interest rate. It can convert your many revolving accounts into one easy to manage, installment account. With an installment loan, you will be able to watch your balances go down each month, and know the date it will all be paid full.

2. Debt settlement program

If something significant has happened in your life, such as loss of a job, you may qualify for a debt settlement program. Debt settlement means that you are not paying all of your debt in full. Therefore, any lender looking at your credit history in the future, will see that you settled debt.

While it is possible for you to work with each of your creditors and do the negotiations yourself, it is not the best method. Professional debt negotiators are much more experienced and may have significantly better results. Also, dealing with the collection departments of the different credit card companies can be very discouraging. Choose a debt settlement program that is reputable. Be absolutely sure that you understand the costs associated with the services you are to receive. Beware of scams.

3. Bankruptcy, a last resort

Going bankrupt is a very serious decision. It involves attorneys and the court system. While it is true that a discharged Chapter 13 bankruptcy eliminates your debts, you will feel the consequences of your choice for many years. You may not be able to get a mortgage to buy a home for up to 5 years. You may have trouble getting a new credit card. Consider the long-term effects of bankruptcy carefully before deciding you can't do either of the first two options. Bankruptcy should be a last resort.

 

About Author:

Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.

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