Credit Card Debt Relief?
Do you have credit card debt? Are your monthly bills swallowing up your budget before you even had a chance to take out a bit of money for necessities? If so, you are one of the millions of consumers groaning for credit card debt relief.
What Is Debt Relief?
Debt relief is an umbrella term under which there are a number of financial products and also consumer spending modification programs that seek to put an end to the revolving debt trap. In essence, debt relief seeks to stop the accumulation of further consumer debt, while in some cases actually getting some of it forgiven. This latter process is pursued without the need for bankruptcy, and in a slowing economy with a recent increase in job losses, debt relief is a much sought after benefit at this time.
How Does Debt Relief Work?
Consumers -- or hired professionals acting on behalf of individual consumers – contact the various creditors to whom money is owed. In many cases these are credit card companies that have offered credit at higher interest rates. Debt relief is then sought by renegotiating the contractual obligations with the credit company. Oftentimes this involves a reduction of the interest rate, a reversal of late and over credit-limit fees, and in some cases may also include a payoff offer in compromise. In return, the consumer agrees to close the account and refrain from using this particular credit card any longer.
How Much Can A Person Save Through Debt Relief?
Our professional debt relief agents work with consumers to chart a course to financial freedom. Usually this will see the consumer debt free within one, three or five years. Since the compounding interest and revolving credit is stopped cold, consumers will save tens of thousands of dollars, when compared to paying off credit card accounts by making minimum monthly payments until paid off.
How Does Debt Relief Differ From Debt Consolidation?
Sometimes debt consolidation loans are lumped into the term debt relief. This is only partially correct, however, since the debt is not actually relieved, but instead simply shifted to another financial vehicle with more favorable financial terms. Thus, rather than paying on a credit card at 20% interest, the same amount is now rolled into a loan that demands a monthly loan payment at 14% interest. Consumers still save substantial amounts of money, but since the credit lines are now freed up once more and may be used again, a fair number of consumers report that before long they are once again facing huge credit card balances in addition to debt consolidation loans; thus, there truly is little debt relief.
On the other hand, if a consumer is able to avoid using the paid off credit accounts again, she or he stands to gain a bit of headway over those who are accepting the debt relief coupled with renegotiated terms (see debt settlement). This is true simply because this latter means of getting out from under oppressing debt will leave a notation on the credit profile that may temporarily bring down a consumer’s FICO score. If you would like to get more information on getting debt relief, start by filling out the quick form to the right.
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