Credit Card Debt Help:  Compare your options

Struggling with credit card bills can be extremely stressful, regardless of your financial class. The rich, the poor and those whom are just average, all struggle with credit card debt. When trying to find help with your credit card bills, it’s important to compare your options before you actually hire a company to help you.  When making minimum payments on your credit card bills, it’s important for the consumer to understand that a good portion of the minimum payments they do make, are applied towards finance charges. When having high interest rates, it’s important to find a way to pay more than the minimum payment given you wanted to live a debt free life. If making the minimum payment is not possible for you, then it may be time to compare your options when looking for credit card debt help.

In short, we’ll begin to explain several different ways on how you can consolidate your credit cards. With proper knowledge and comparing your options, consumers will have a better grasp on how to repay the debt they owed, without paying so much in interest, annual fees and other forms of finance charges. 

3 paths to credit card debt help

Path 1: Continue to make the minimums on your own
Sure, doing this would be a wonderful accomplishment, but the fact of the matter is, most consumers make minimum payments for an endless amount of years since so much of the payments are lost towards interest. Given you wanted to pursue path one, it’s important to create a plan of some sort.

(a): Make more than the minimum payment
Let’s pick out a few facts here, most consumers pay only the minimum required amount when the statements are due. Credit cards are designed to be paid off in full every single month and given this could not be done, paying two or three times the minimum payment is extremely important. With the economy the way it is, many consumers are living paycheck to paycheck and find it hard to even do this. If you cannot at least double your minimum payment, continue on to the next path.

(b): Transfer your cards to an introductory one
Transferring your credit cards to an introductory card is often a good choice, if its possible. Most of the banks will usually offer these introductory rates in an attempt to gain more customers. After all, this is probably how you initially got in debt to begin with.  If you already have an introductory card or your able to obtain one, transfer your credit cards with the highest balances and annual percentage rates, to the introductory card.  This way when making the minimum payments on your credit card debt, you’ll find more go towards the actual balance.

Path 2: Consumer credit counseling service
The consumer credit counseling service is the ideal solution for consumers looking for credit card debt help. This type of program works by consolidating all the unsecured debts a consumer may have, into one lump sum. A non-profit will usually administer this service and each month when the consumer makes this new minimum payment, it will then be sent to the creditor on a set of new terms. The purpose of the consumer credit counseling service is to assist in reducing the minimum payments, while reducing the interest rates.  This is the most popular path when trying to find credit card debt help. Credit counseling has been around for several years, and will not harm the consumer’s credit rating unlike that of other programs. This type of solution will keep the consumer current, just as if they were making the minimum payments outside of this program.

Path 3: Debt settlement service
The debt settlement service can be both beneficial or devastating to a consumers credit rating. When having credit card debt, many consumers cannot make the minimum payments on their own or in a credit counseling service. Because of this, debt settlement is often issued in an attempt to avoid the consumer from filing bankruptcy. The debt settlement service cuts the debt in half in most cases and since the balance is reduced significantly, the creditors often become upset. If the consumer is current with the minimum payments, this program will harm the consumer’s credit. On the other hand though, if the consumer is years delinquent or the accounts are already in collections, this program may increase the consumer’s credibility. The debt settlement service allows the consumer to make one monthly payment which will build in a trust account and once certain levels are met (usually fifty percent), the accounts will be settled.

Questions about finding credit card debt help

1. How effective are cash advances to paying my debt?
   The cash advance loans are often short term loans that allow the consumer to borrow cash anywhere from a few days up to a few months at most. Getting a cash advance in an attempt to repay credit cards is never a good idea. If you thought your interest rates on your credit cards were bad, the typical APR will vary between 300 to 900 percent in most cases. Credit card debt help through the use of these cash advances, is never a good idea. It’s never advised to borrow money from these places as they do not have your best interest at heart.
   
   
2. How can I put an end to creditor harassment?
   Many of the collection agencies whom buy your debt don’t usually follow the Fair Debt Collection Practices Act (FDCPA). As a consumer, you have many rights which are provided to you through the FTC. Telling a creditor on the phone that you wish for them to stop calling, is not enough. You need to send the creditors a written document by US Certified Mail requesting that they cease and desist communication with you by telephone. By law, the creditors must comply and given they do not, they are in violation and you can file a lawsuit.
   
   
3. Can I be sued for my credit card debt?
   Most of the consumers, whom don’t pay the minimum payments on their debt, will have the debts sold to third party collection agencies or law firms. These firms will often weigh the scenario and if the debt was a small balance of let’s say $100, the odds of them filing lawsuit would be minimal. In most cases for higher balances, the creditors often do and will attempt to sue you given you do nothing about the debt.
   
   
4. What is the statute of limitations on my debt?
   The statute of limitations is a legal requirement which allows the creditors to collect, for only a certain period of time. The statutes of limitations do vary depending on the state in which the consumer resides in.
   
   
5. What are the disadvantages to bankruptcy
   Filing for bankruptcy is never a good thing and in fact, many disadvantages exist to filing. Embarrassment, not being allowed to obtain further debt, inability to apply for mortgages are very common downfalls to filing. In most cases, consumers cannot include cannot file unless they have their finances properly audited. Credit card debt help through bankruptcy would be extremely hard, especially with the laws that passed on October 17th, 2005. This was when the bankruptcy abuse prevention and consumer protection act went into place to prevent consumers from abusing this right.

Compare your options, your paths to debt relief

Finding credit card debt help is not all that hard. It’s always important to compare your options through educating yourself on which paths to move forward with.  As always, when path one cannot be done to repay your credit card debt, path two would be the ideal and recommended solution. The third path which explains the settlement offers, is an excellent decision if your ok with it harming your credit score. We hope that explaining these paths and that the five questions addressed some of the concerns you may have had pertaining to your credit card bills. As always, if you need further assistance don’t hesitate to contact us for a free consultation.

A video on credit card debt help: