On average most households in the United States have at least three credit cards. There are 609.8 million credit cards held by U.S. Consumers with an average APR of 13.67%. It is easy to see why the nation is in a debt crisis as 98% of the total U.S. revolving debt is made up of credit card debt. For those who are burdened with overwhelming credit card debt there is help available through debt relief programs. There are numerous non-profit organizations that will help guide a consumer towards debt freedom with credit card debt settlement options. A certified credit counselor is available through these organizations to analyze the financial situation of the consumer, discuss or create a budget and provide the available options that will best support the consumer in settling their credit card debt.
In general there are three options for resolving overwhelming credit card debt. Each of these options should be discussed with a certified credit counselor who has the knowledge to provide guidance towards making the most appropriate debt relief decision to resolve the debt as well as provide educational tools to prevent debt occurrence in the future.
Debt Consolidation- for the individual who has income and can make payments, debt consolidation may be an option. Debt consolidation can combine credit card debts into one lowered monthly payment that will help the debtor to pay down their debt in a more affordable way. A credit counselor can mediate between the debtor and creditor to lower interest rates and potentially remove penalties and or late fees, etc.
Debt Settlement- If a debtor can not afford payments on their credit accounts and have likely gone to collections, debt settlement may be an option. Debt settlement is process in which a debt negotiator can be hired to negotiate with creditors on behalf of the debtor to agree on a less than full settlement amount that may be paid to bring the account to a zero balance. The debtor can settle their account without paying the full debt.
Bankruptcy- This option is advised as a last chance debt relief option. Bankruptcy allows a debtor to file bankruptcy with the aid of an attorney to have all eligible debts discharged creating a “fresh slate”.
For every choice there is a consequence. This is why it is vital that the debtor discuss each option fully with their credit counselor. There are implications with each procedure from tax liabilities, to how the process will affect a credit score and so on. If there is the possibility to pay a debt then by all means make arrangements to do so. For those who do not have the income to pay a debt what so ever there is help available. The first step towards credit card debt freedom is to speak with a credit counselor.
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