Also known as debt relief, debt settlement provides a way to reduce your debt load by paying a part of what you owe in exchange for a one-time payment in full. The best credit card relief program you choose may vary depending on your income or budget, the amount you owe, or the status of your bills. These programs can help you resolve credit card debts after you’ve exhausted other options.
Besides debt settlement, a debt relief program could involve clearing your debt altogether through bankruptcy, adjustments in your interest rate or payment schedule to lower the amount payable or negotiating with creditors to see if you could pay less than the full amount owed. Read on to learn more about the various credit card relief programs that may be available to you.
Debt Settlement Program
A debt settlement program involves a professional, such as the ones you’ll find at www.FreedomDebtRelief.com, negotiating with your lender to reduce the amount of money you owe. To begin the settlement process, you may need to set up a savings account with the debt settlement company of your choice. Once you have an account, you can start depositing cash monthly to accumulate funds until it totals the amount needed for the debt settlement. Afterward, the company can negotiate with your creditor regarding your financial status and request them to accept a percentage of the unpaid debt. Once there’s an agreement, your lender can take the money from your account and offset the outstanding balances. Although your debt settlement company may help lower your credit card debt, beware that there are a few risks associated with these programs.
Credit Counseling
If you need credit card debt relief, a reputable credit counselor can advise you on managing your finances. Besides that, they may also help you develop a budget and access educational resources as needed. Credit counselors have extensive training in budget, money and debt management, and consumer credit. Most reputable credit counseling companies are non-profit organizations and serve clients online, over the phone, or through local offices. If you choose to work with a credit counselor, you should consider working with companies that offer in-person consultations.
However, be advised that the non-profit status of credit counseling service providers doesn’t guarantee that the solutions you will receive are free. Some organizations may charge high fees or encourage their clients to make regular contributions, eventually running up the debt.
Debt Management Program
A debt management program is a type of debt consolidation that may help debtors eliminate credit card debts without taking out any loans. The company and the creditor can negotiate a repayment plan that suits your budget. A lender may agree to reduce or eliminate the interest rates on your debt, allowing you to clear your debts faster. Also, monthly payments may vary depending on your budget. Since you will pay back all the money you borrowed, this credit card relief program may help build a positive credit report.
Drawbacks associated with this program include penalties for missing monthly payments. Also, it may not be an option for consumers without unsecured debts.
Finding the Best Credit Card Relief Program
If you’re pondering what’s the best credit card relief program, keep in mind that debt management plans are considered the most effective credit debt relief option since they may allow consumers to repay debts based on their income and spending behavior.
However, there are situations in which that option simply isn’t viable. In such instances, one of the others listed above might be your best approach. The thing to do is tailor the strategy to your situation in order to achieve the most favorable result.
