Credit Card Relief Programs – The Best and Legitimate Debt Relief Programs
When you get short on cash, you will often turn to credit to get the things you want. This cycle of living beyond one’s means can result in serious consequences. Before you know it, you are overwhelmed with credit card debt. Then you start searching for credit card relief programs. Let us talk about the legitimate programs that provide you relief.
The underlying problem with credit card debt is that it perpetuates itself. Once your monthly minimum payments get too high, you start to have less and less cash each month. That is when you start using the credit cards to buy groceries and the whole thing gets out of hand.
Fortunately for the consumer, there are options for credit card relief programs that are legitimate and effective. Before you get involved in a debt relief program, you should understand the different types and how each of them works.
We start the discussion with bankruptcy because it is often the first option that consumers consider. Bankruptcy is expensive and has long-lasting effects. There are pros and cons to bankruptcy. If you pass the means test for Chapter 7, you can wipe out all your unsecured debts. This is the major benefit. The biggest drawback is the effect on your credit. If you are overwhelmed with credit card debt, then there are alternatives that may give you better results than bankruptcy.
Debt consolidation is a legitimate way of handling credit card debt, and it is used by many consumers all over the country. But for all of the good it can do, debt consolidation does have several challenges.
On the good side, a debt consolidation loan with a lower interest rate than your credit cards will lower your interest rate debt. A debt consolidation loan also makes paying your debts easier because it takes several payments and condenses them down to one.
One of the big problems with debt consolidation is that it is a program based on a loan. If you have bad credit, then you may not qualify for an unsecured personal loan big enough to cover your debts. If you do qualify, the interest rate may be too iva 個人自願安排 high to make it worthwhile.
With bad credit, you can get a secured personal loan that requires you to put thousands of dollars of your personal property down as collateral. If you default on the loan, then you lose your property.
Another problem with consolidation is that it does not address the core issue of high credit card debt. Debt consolidation is much like a financial shell game where you move your debt from one place to another until it is all under one cup. You have the same debt, but now it is all in one place. It does not address the issue.
Debt management usually involves working with a credit counseling agency, working out payment arrangements with your creditors and then paying off your debt based on the money you have left over each month. If you are overwhelmed by debt, then you can see the challenges with this program.
While debt management teaches important financial skills, it also requires you to adhere to a strict repayment schedule. A debt management program does not attack the core problem – how much you owe. That is covered by the next debt relief program – settlement.