How to Dig Yourself Out of Credit Card Debt
If you're considering debt relief and really want to have a panic attack, head over to the FICO and grab your credit score. Now take a few deep breaths before planning your next move. You need to make a move in order to avoid falling further into debt. While paying off high credit card bills, there are few strategies that you can consider. Let's spend a few moments looking into the different strategies, and find out if debt consolidation is the right path.
Pay Day Loans - Say No
The first misstep for most debt sufferers is to patch bad credit ratings with payday loans.
- No questions are asked. You will not need to provide any info on your current financial state.
- The funds are not restricted.
So where to now? The stress of surmounting credit card debts is still on the table. If you've ever considered credit counseling, you may know that they will reduce your debt a considerable amount and then waive past dues. There is a serious repercussion on the future credit side of things. If you seek credit counseling and even if you successfully undergo payment plans, and rid yourself of debt, this service will affect future credit reports.
Debt settlement is one of the most popular choices that people with credit card debt turn to. With debt settlement, you work with an agency that negotiates with your creditors to reduce the balance of your credit cards. Creditors are often willing to reduce portions of the debt because it will assure that they will receive some of the due amount. They realize that if the debt is too high, they may never receive any of the money they are owed.
Here are a few tips:
- Continue making payments during the settlement process.
- Call the company directly. Some companies will reduce the amount of the debt without a third party if you talk to them.
- Look into if the creditor has a base amount that they will forgive. This often means that they will not negotiate.
- Do not sign on with a debt settlement company that asks for money up-front. Most debt settlement agencies will charge based on a percentage that they manage to get forgiven.
For more details on debt settlement, read up with the Consumer Finance Protection Board.