Guide to Credit Card Debt
If you're like many Texas residents, you may be struggling with credit card debt that you'd like to pay off, reduce, settle, or eliminate as quickly as possible. Credit card debt statistics from a recent study in Forbes Magazine reports that three of the top twenty worst cities for paying off credit card debt are located right here in Texas - San Antonio, Austin, and Houston. The good news is, there are a variety of popular credit card debt relief options available to consumers, that can not only help remove stress, but possibly save you a large amount of money as well.
To see what debt relief could do for you - and find out how much you could save, take a moment to answer a few simple questions online, and you will receive a free debt relief analysis and savings estimate at no obligation.
Credit Card Debt Relief
We're all familiar with the credit card debt trap, which can be summed up by the plastic promise "buy now, pay later!" Unfortunately, the lure and convenience of credit cards carries with it a very high price for consumers: Items purchased with revolving credit cards can end up costing consumers two or three times their actual purchase price - when you factor in high interest rates, late fees, penalties, and the many years it often takes to pay off credit cards in full.
The emotional cost of high credit card debt is something that can also suck the lifeblood out of cardholders and their families. When you fall behind and starting getting calls from bill collectors who are trying to extract or recover the most amount possible from you, or trying to get you to commit over the phone to a future payment day when you can hardly figure out how to make it through the day - you have a debt crisis on your hands.
Fortunately for Texas residents going through personal difficulties, there are a variety of credit card debt relief solutions that can provide much needed relief for consumers -- including debt management, credit counseling, credit card debt consolidation, and credit card debt settlement. If you're struggling with debt, know that you're not alone and debt relief options are available to you if you are in situation where you need to reduce debt, lower payments, or, if you are going through hard times financially, possibly settle credit card debts for much less than you currently owe.
To learn more about your debt relief options and how you can be helped, take a moment to answer a few questions online and we'll connect you to your free debt relief analysis and savings estimate today.
Credit Card Debt Consolidation
Texas residents are not unlike consumers across America: Credit cards make it very easy to accumulate debt that can get out of control in a hurry. Despite efforts to budget and be disciplined, economic hard times sometimes cause individuals and families to use high-interest revolving credit cards to pay for the essentials in life like food, gas, and even medicine. Fortunately, credit card debt consolidation is a viable option that can not only stop the bleeding, but potentially save a large sum of money as well.
Often when the term debt consolidation is used, a debt consolidation loan is what comes to mind. However, there is a clear distinction that needs to be understood between debt consolidation relief and a debt consolidation loan. A debt consolidation loan typically combines all of your high interest credit card debt and consolidates them into one, single lower interest rate loan. It is very important for Texas residents to understand that these types of loans may come at a very high price -if you're not careful and disciplined.
Here's why: Your credit card debts are unsecured debt, which means that they are not secured, backed up, or "collateralized" by real property such as your home or another asset. Credit cards are extended to you by virtue of your credit and the interest rate you pay is a reflection of your credit standing and that's how credit card companies manage their risk when extending you a credit card. They KNOW that a certain percentage of people WILL DEFAULT on credit cards and this is why they often charge interest rates as high as 29% or higher! If you default on the terms of your cards and do not pay off your credit card debt as promised, your credit score will certainly be affected - but, the good news is, you are not putting your home or other property at risk.
How Credit Card Consolidation Loans Work
When you take out a credit card debt consolidation loan with the goal of getting out of credit card debt or reducing your credit card debt as quickly as possible, the loan you take out WILL BE backed by your home or other asset. If you pay off your debt consolidation loan faithfully, that's fine. However, if you fall behind in your debt consolidation loan payments, you could be putting your home at risk! Many people overlook this hidden danger in debt consolidation loans, but it bears noting that in tough economic times, when layoffs or job losses are quite common, defaulting on a debt consolidation loan meant to help you get out of debt, or pay off credit card debt quickly, could easily cause your situation to go from bad to worse.
Even if you do make your payments on time, you may be like many people who end up repeating the process of running up high interest credit cards. Now, you've got a debt consolidation loan to pay off AND a fresh batch of credit card debt to carry around like a millstone on your neck.
The bottom line: debt consolidation loans can be helpful in some situations, but you should explore all of your debt relief options prior to taking out a debt consolidation loan.
Credit Card Debt Relief Options
For Texans who need credit card debt assistance, there are a variety of debt relief options in addition to personal bankruptcy, or even putting your home at risk via a credit card consolidation loan. Paying off credit card debts relatively quickly or reducing credit card debts can be achieved through a variety of other debt elimination options.
Credit Card Debt Management vs. Debt Settlement
For Texas residents who are trying to get out of credit card debt, settle, or even eliminate credit card debt, two options that can be considered are debt management and debt settlement. The two are quite different in that with debt management, you are paying back the entire principal amount that you owe. With debt settlement, you are NOT paying back all that you owe, but looking to settle your credit card debts for less than the full amount owed, often dramatically less. With a debt management plan (DMP) or debt management arrangement with your credit card companies, coordinated by a credit counseling agency, you typically are allowed the benefit of paying off your credit card debt at a lower interest rate and possibly with late fees and penalties waived as well. By reducing your interest rates and fees, more of your credit card payment goes to actually pay off the actual amount of principal owed, instead of just "servicing" the interest each month.
When you settle your credit card debt, a debt negotiator or debt mediator typically will work on your behalf will try to negotiate with the credit card companies in an attempt to get them to agree to accept a lower lump-sum payment in exchange for considering your debt satisfied or "settled for less than the full amount owed." Of course, to settle your credit card debt successfully, it is the cardholder who has the responsibility of saving or "setting aside" money each month that can eventually be used to extend a reasonable settlement offer to the credit card company in question.
How Much Can Debt Settlement Save?
Every credit card debtor's situation is unique, but settlement, potentially, could save a substantial amount of money. Consider this economic fact of life for the credit card companies: When an individual falls behind seriously on credit card payments, the credit card company may decide to "sell off" what is considered to be "bad debt" for as little as ten cents on the dollar to a third part agency or debt collector. It shouldn't come as a surprise, then, that credit card companies, if you are going through tough times financially, may be willing to accept a reasonable settlement offer made by you or on your behalf, by a credit card debt settlement firm.
If you do decide to take advantage of debt settlement, understand at the outset how much you are likely to save, how long it may take you to realize your savings, and how credit card debt settlement could affect your credit -- and most importantly choose a company that has a high rating from the Better Business Bureau (BBB) and avoid companies that scam or pressure consumers without disclosing all the facts.
Even though individuals who default on credit card companies can be sued for non-payment, and even though credit card debt settlement can affect credit negatively, credit card debt settlement has become an increasingly popular and acceptable alternative to bankruptcy for many people who find themselves in over their heads with credit cards and other unsecured debts.
To see what debt relief could do for you and how much you could save, you can get a free debt relief analysis and savings estimate.