Credit card debt can quickly eat a hole in your budget if it is not carefully paid off each month. Despite that fact, many Americans roll their balances over at the end of the month while paying only the minimum payment. With the relatively high APR rates of most credit cards, the interest compounds quickly. It’s so easy to take out a piece of plastic and swipe it at the store or gas station, and this aspect of credit card use can lead people to take an “out of sight, out of mind” approach to their credit card debt.
This can turn into a habit of ignoring the credit card bill, which eventually catches up in the form of late payments, higher interest rates, or even lawsuits. Often times, individuals try to deal with their credit card debt themselves; only to end up waiting on the phone, arguing with a collector, and usually getting even more stressed about finances. Fortunately, there are some tried and true methods to dealing with unmanageable monthly payment amounts, late fees, and interest rates.
Evaluating Debt Relief Options With A Professional
Debt reduction loans are a popular choice when cardholders are facing high interest rates and multiple lenders, and can be very effective. By moving the balance from several high interest rate cards to one low or zero rate card, the individual can pay off the balance much faster and escape the trap of high interest cards that seem to never go down. By contacting a company that specializes in programs for debt reduction, cardholders can speak with professionals who have helped hundreds of clients who are in the same situation. It’s often better to let the pros navigate the nuances and complexities of debt reduction loans, as they have day to day experience doing just that.
Even the most well informed consumers can quickly get into hot water during negotiations with creditors due to unfamiliarity with the industry, and people often react emotionally when it comes to their own finances. The advantage that a company specializing in debt reduction plans can offer is an objective viewpoint and experience to draw from. Not all debt reduction plans are created equally, with some using home equity loans and others using personal loans. A professionally certified organization can help you make the correct choice for your individual situation.
Two Main Types of Debt Reduction Loans
Once you’ve decided on one of the debt reduction plans, it’s time to review your finances with the company and decide on a program. Depending on your credit score, you may qualify for a low interest rate card that is designed just for debt reduction, or even a zero percent interest rate for a certain period of time. While home equity lines of credit can be used, the cardholder will want to make perfectly sure that this is not a case of exchanging a small problem for a potentially bigger one. While home equity lines of credit (HELOCS) usually offer a lower interest rate than comparable personal loans, it is essentially trading an unsecured loan for a secured loan; which can result in losing a property to foreclosure if the home equity line of credit goes delinquent.
With many borrowers that have good credit now able to receive zero percent interest rates; the appeal of home equity loans to use in debt reduction has waned. It’s now totally possible to consolidate all of your high interest credit cards onto one card with one payment and a much lower interest rate, without having to put your home on the line as collateral.
Professional Debt Reduction Plans are the Smart Choice
These types of programs work best when they are individually tailored to each person or family situation, which is what the best financial counseling companies do. By working with professionals who are experienced in executing many different types of options, you’ll be able to confidently reduce your debt with the help of experts who have seen almost every type of debt scenario possible. One eternal truth about debt is that it will not get better if no action is taken, or with a minimum payment. No matter what your scenario is or how confusing it may seem, the best debt reduction organizations have seen it all; with the experience to prove it. When the pain of the monthly bill becomes too much to endure, remember the process to finding a solution:
- Identify the Debt Problem and Its Parameters
- Evaluate Debt Relief Options With A Financial Counselor
- Compare the Different Types of Debt Reduction Programs Recommended
- Decide On the Right Organization For Your Debt Scenario
- Take the Plunge – Sign Up for a Debt Reduction Program and Follow All Steps As Advised
Few things are as satisfying as seeing the light at the end of the tunnel and regaining control of your personal finances after a long struggle with credit card debt. Are you ready to take the next step? Contact a reputable organization today to learn about the best debt reduction programs for your credit card debt.