How much credit card debt do you have? $5000? $10,000? $20,000? More? You are not alone. According to the US Census Bureau, the average cardholder is carrying about $6500 in debt, and more than 13% of Americans are struggling to pay off more than $10,000 in unsecured debt. This has left many consumers wondering: how can I get out of debt?
Becoming debt free is a rewarding experience that can change your life for the better. However, getting rid of credit card debt is very difficult if you only pay the minimum monthly payments on credit cards. It is always a good idea to pay extra each month toward your credit card debt if it is financially possible to do so. If you have multiple credit cards, it is best to prioritize your accounts according to interest rate, paying down the highest APR accounts first.
But let’s face it: a lot of us just don’t have the extra income to set aside for extra credit card payments. If your credit card debt becomes overwhelming, there are programs that can help you pay off your debt in less time so that you can become debt free and stay that way. Just fill out our simple form for a free debt consultation from a knowledgeable financial coach, or read below to explore your options.
Becoming Debt Free Through Debt Consolidation
A debt consolidation company can help you negotiate with your creditors to help reduce the interest that you pay each month on your credit card debt. In a debt consolidation, several different unsecured debts can be combined into one monthly payment. By reducing your individual interest rates, a debt consolidation company can ensure that you pay down your debt quickly while paying the least amount possible each month. Debt consolidation is not right for every situation, so it is important to talk to an expert to find out if it is the best option for you. Not all types of debts can be consolidated, secured debts such as home equity loans are generally ineligible for debt consolidation.
Becoming Debt Free Through Debt Settlement
In a debt settlement, the debtor makes an offer to the creditor to settle the debt for less than the amount originally owed. It is up to the creditor as to whether or not they accept the settlement offer that is presented to them. If you choose to do a debt settlement, you may want to use a professional debt negotiator to find a settlement that works for both you and your creditors. A debt negotiator can also help you create a debt management plan, that will ensure all of your outstanding credit card debt is paid off in five years or less. There are some drawbacks to debt settlement plans – when a company accepts a settlement the debt write off can have a negative effect on your credit score. If however your credit card debt has become impossible to pay each month, a debt settlement program may be able to help.
Becoming Debt Free Through Credit Counseling
If you are unsure how to pay down your credit card debt and become more financially stable, you might want to speak to a qualified credit councilor. Credit counseling can help you determine the best way to pay off your debt while still being able to meet your financial obligations each month. A good credit counselor can work with you to create a plan to fix your current financial difficulties and prevent similar problems in the future. Although the cost of credit counseling varies, many programs offer low-cost or no-cost ways to get started. You can meet with a credit counselor in person, or you can have a consultation on the phone. Although facing up to your financial problems can be difficult, it is the first step toward getting control of your own money and ultimately, becoming debt free.