Are you loaded with credit card debt? No worries, you are not alone. The majority of US households currently has at least one credit card with a balance carried over month by month. And everyone has the question about what the best way is to finally pay it off. There are mainly two different methods for paying off credit card debt. For this article we assume that you do not have any funds available to pay it off and that you have to consider other options. The 2 main options available for you are credit card debt consolidation and credit card debt elimination. What is the difference between credit card debt consolidation and credit card debt elimination?
Credit card debt consolidation is a reorganization of all your existing debt into one single loan with one single payment – usually done with the help of a debt consolidation company. Sometimes consumers are able to do this alone – often by getting a new credit card with a lower interest rate for 6-12 months. But we have seen it too often that this really just delays actual debt consolidation. With debt consolidation you usually will have 5 to 10 years time to pay off this single, new loan. So, what is debt elimination then? Debt elimination is the process of completely paying off of credit card debt following a negotiated settlement with the credit companies. Instead of waiting years that you eventually make your payments the credit card companies will accept a lump sum paid within 90 days and will in return close your account for good – effectively eliminating your debt. The advantage of this process for the credit card companies is reduced risk and better cash-flow. Be advised that you will depend on the negotiation skills of a debt consultant for this. Don’t try this on your own unless you really know what you are doing.
By using a debt consolidation program a professional debt consultant will help you to work thru your debt. He has the tools and the connections and makes his money off the final, single loan that you end up with. I consider that a win-win situation for everyone involved. Before consulting with a debt consultant you will want a current copy of your credit reports and account information and balances of each of your credit card accounts.
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