Your Life Without Debt
San Diego, California (PRWEB) March 08, 2013
For consumers that have high bills, the next few paragraphs will provide them with insight, on the best ways to obtain credit card debt relief.
First off, what is credit card debt relief?
True debt relief is when the total debt that a person owes is forgiven, reduced or halted from growing.
How can a person pay off their credit cards and increase their credit score at the same time?
The best way to obtain credit card debt relief, as far as for your credit score being concerned, is to pay off your debt by paying more than minimum payments.
Typically if a person has maxed out credit cards with at least an interest rate of around 15% or higher, by paying minimum payments only, it could take them close to ten years, to pay off their debt.
Pay Double the Minimum Payments:
If a person pays double their minimum payment, they could be on path to paying off their debt in around three years and sometimes even faster.
Consumer Credit Counseling:
A consumer credit counseling company will negotiate with their client’s creditors to reduce the interest rates.
The consumer credit counseling agency will also set their clients up to have only one consolidated monthly payment.
The agency will draft the monthly payment from their client’s bank account, and then distribute the individual credit card payments to their creditors.
This option saves people money in interest, and helps them to pay off their debt faster, than if they were to pay minimum payments on their own.
This type of program usually inflicts less of a negative impact on a person’s credit score, than debt settlement would.
Ruth Adorno, a manager at Golden Financial Services says “it is important for consumers to check if a consumer credit counseling company has a membership with either the Association of Independent Consumer Credit Counseling Agencies (AICCA) or the National Foundation for Credit Counseling (NFCC). Non-profit companies are also under strict regulation, which provides a certain level of protection for their clients."
A debt settlement service can be the fastest route to help a person pay off all of their unsecured debts, including credit cards.
A debt settlement program allows a person to get out of debt in around three years and sometimes faster. Like with a consumer credit counseling program, a person would have only one monthly payment. A debt settlement program payment will usually be smaller, than what a person’s payment would be on a consumer credit counseling plan.
Debt settlement services will usually have more of a negative effect on a person’s credit score in the beginning of the program. However, since a consumer can pay off their bills in as fast as two to three years with debt settlement services, they can often be on track to rebuilding their credit score by three to four years.
Bankruptcy should be a person’s last option, regarding debt relief. When a person has bankruptcy on their credit report it makes it difficult for that person to get approved for 7-10 years, for any type of credit.
If a person needs to buy a car, rent a home or buy anything with their credit, they will most likely get denied for 7-10 years, when having bankruptcy on their credit report. If they do get approved, they will automatically receive the highest possible interest rates, costing that person thousands of additional dollars per year in fees.
When is bankruptcy a good option?
- Bankruptcy can help a person to avoid foreclosure.
- Sometimes people will not qualify for consumer credit counseling or debt settlement, and bankruptcy may be the only option that they qualify for, in order to obtain debt relief.
Consumers can locate reputable bankruptcy lawyers at martindale.com. It is important for consumers to explore all of their options and get educated, before finalizing any decisions. If you have credit card debt, hardship programs here are also worth exploring.
The Better Business Bureau:
Before a person contacts a consumer credit counseling company or a debt settlement company, they should utilize the Better Business Bureau as a resource.
A consumer should think twice about using any company that has less than an “A” rating with the Better Business Bureau, or less than a five year business track record.
Golden Financial Services is a top rated credit card relief company that has been in business since 2004. Their effective debt relief programs have the lowest fees and most affordable rates in the country.
Learn more about all of the credit card debt relief programs available as of 2013.