Due to the current economic recession, there have been a lot of people that have fallen into tough times.  Many people have lost their jobs, lost their homes, or even losing their businesses.  There are a record amount of foreclosures and consumer credit card debt is sky rocketing out of control.  If you are experiencing some of these problems, then you are one of the millions of people who are having a tough time coping with the recession.  Fortunately, there are ways to get out of credit card debt if you are looking for a solution.

The first thing that you should be aware of before you get out of debt is that your credit rating will be hurt by whatever steps you take to eliminate your credit card debt.  This shouldn’t be a problem if you are trying to get out of credit card debt because the last thing you should be worrying about is whether or not you can go back into debt.  You credit score can be improved in the future and for now is going to have to take a hit.

There are two main types of debt relief programs available for people.  There is the credit counselling and there is debt settlement.  Both of these programs do have their advantages and disadvantages.

Credit counselling programs have the benefit of allowing you to consolidate your loan into a single payment, while also lowering the interest rate. 

This means that instead of making multiple payments to different lender, you can make a single payment every month.  The problem with this type of program is that a lot of people cannot afford to make the single payment every month.  Often it works out to be the same or more as the minimum monthly payment that consumers were paying. 

Credit Counselling looks to eliminate people’s debt within 5-7 years, looking to pay back roughly 135% of the current loan.  Another significant problem with credit counselling is that if a payment is missed often the credits will kick the borrower of the program, pushing the interest rates back up again.  The success rate in credit counselling is very low because of some of these factors.

The second way to get out of credit card debt is called debt settlement.  The advantage of debt settlement is the savings of money and time.  Many debtors who go on this program end up saving 50% of what they owe and are out of debt within a few years.  The disadvantage to this debt program is that in order to settle the loan, the debtor must let the account fall into default.  This puts the creditors in a position to negotiate a settlement, which can have a very negative impact on your credit score. 

With the current state of the economy, it is not surprising that people are looking for ways to get out of credit card debt.  These two programs which are designed to help relieve consumers of their credit card debts are very useful.  If you are interested going into a debt relief program, then do your research online and find the best one that suites you.