Credit card debt settlement or credit card debt consolidation which is a better debt relief method for my financial situation
If you are someone who is experiencing restless nights and losing sleep due to your credit card debt, then logically you are contemplating all of your options on how to resolve this predicament. You may have talked to a few different organizations or spent countless hours researching the internet to come to a determination whether to go the method of credit card debt consolidation or debt settlement.
What it truly comes down to is the debt situation that you are currently experiencing. If you do not have a very large amount of debt and aren’t having an extremely difficult time paying it down then credit card debt consolidation may be a more suited fit for you. What the credit card debt consolidation organization can do is minimize the interest rate on your accounts, and set up a reasonable repayment program in which the company will divvy out the payments to the creditors on your behalf. At the end of the process you will be free of your debts, however the process can take up to 5 years and you do have to pay back the entire amount plus interest. But you will in the end be released from the handcuffs of debt.
Now does credit card debt consolidation work for every debtor, of course not. You won’t really see too much of a reduction in the amount that you must pay to creditors each month. So for individuals who are really struggling to keep up or have fallen past due, credit card debt settlement might be a more lucrative option. The best applicant for debt settlement is somebody who is around $15,000 in debt or more and are experiencing real problems staying up to date with the monthly minimum payments. Taking into consideration that with debt settlement you will have a lowered payment you dish out every month due to the fact that you are not going to be paying back the bill in its’ entirety.
What it really comes down to is, going with credit card debt consolidation you pay back around 135% of what you owe, which is a huge difference from the amount you would pay back utilizing the monthly minimum payment scheme. However it’s also a tremendous difference from the money you will pay back with settlement. With going through credit card debt consolidation the time you will be in debt is close to 5 years to be free of debt. Debt settlement can look to save in and around 40-50% of what you owe and be out of your debt situation in 2 years or less, depending on how fast you can get together the cash it takes to make the settlement.
Steve Bis is a debt analyst with the US Consumer Advocate, which practices debt relief.
- steve bis
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