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5 Quick Ways to Get Rid of Credit Card Debt

Updated on March 10, 2015

Tired of those harassing debt collector phone calls in the middle of the night? Perhaps you’re one of the millions of Americans now dealing with late payments, collection accounts; or even worse, a deficiency judgment, as brought on by the “Mortgage Meltdown of 2008.” According to the Federal Reserve Bank, the average credit card debt now stands at a whopping $15,799.00. Who needs this, right? In fact, if you delve just into the long-term effects of a tarnished credit history, odds are you’ll uncover what appears to be very obvious: “Bad Credit Cost Money.” Aside from its adverse monetary effects, individuals with good credit histories (i.e., with scores of 720 and above), indeed share other nonfinancial societal benefits, such as easily obtaining apartment leases, insurances and employment. Do you have what it take to join the 700 club? Joining such a select group of individuals will first entail creating the kind of money management system that can truly help rid you of excessive credit card debt. The following list below highlights five of the most effective financial management strategies available to help mitigate your financial struggle:

#5 Settling Your Own Debts…

What’s debt settlement? Debt settlement is a form of debt reduction strategy used mainly by debt settlement companies to negotiate with your creditors on your behalf to accept payment of a percentage of an unsecured debt to satisfy your overall unsecured debt. The key point to remember is that most of what a debt settlement company does can indeed be done own your own, considering you have the necessary negotiating skill levels. By negotiating a settlement plan with your creditors, in essence, what you’ll be doing is minimizing the risk of doing business with a shady debt settlement organization, which over the years have gain a nasty reputation of duping some clients out of their monies.

#4 Finding a Reputable Credit Counseling Agency...

Let’s face it, some debts are just too widespread to overcome on your current salary. This is where using the services of a bona fide consumer credit counseling agency becomes optimal. What’s credit counseling? Consumer credit counseling is a form of debt reduction services provided to help individuals with excessive debt issues. Serving as an alternative to bankruptcy, which is considered the zenith of debt reduction, the debt management industry over the years has largely become a viable option for many individuals and households battling a deluge of financial issues. Buyer beware: there are many reputable credit counseling agencies, helping millions of Americans with debt problems each day; nevertheless, there are, indeed, some bad apples in the bunch, which only operate to bilk consumers of their hard earn monies by way of excessive fees. To protect yourself from any scams, choose a nonprofit agency with a BBB rating.

#3 Creating a Debt Management Plan…

As indicated above, consumer credit counseling agencies are within the debt management industry, working with individuals to devise better money management habits. One of the main tools of these tactics consists of what called a debt management plan (DMP). A DMP, if used correctly, will allow you to better manage your personal finances by consolidating all your debt into one lump payment. Will this hurt your credit score? While enrolled in a DMP your credit reports will be notated as being associated with a credit counseling agency, but will neither increase nor decrease your credit scores. Alas, you can expect to pay reasonable fees for a good DMP that average anywhere from $30 to $50, depending on location.

#2 Working with a Debt Settlement Company...

Contrary to certain negative publicity, debt settlement does have its advantages, but because of the high fees associated with some debt settlement firms, it might be a good idea to try to settle your own debts first. However, if you find that you neither have the expertise to negotiate a settlement nor the money to pay for a DMP, perhaps the use of a reputable debt settlement firm becomes a viable option. What a debt settlement firm does for his or her clients isn’t too hard to comprehend: you make monthly payments to the firm, which then are held in an escrow account to build in value until your creditors agree to accept a drastically reduce settlement offer. The important thing to remember here is that debt settlement isn’t as bad as bankruptcy, which can stay on your credit report for well over 10 years.

#1 Choosing to Liquidation Your Debt through a Bankruptcy…

Bankruptcy. Just the mention of the word conjures up images of a debt laden individual who was irresponsible with her or her personal finances. Realistically, this isn’t the case. Most bankruptcy cases are brought on by unintentional events, such as a loss of employment, an unexpected medical expense or even a sudden death in the family, all of which has proven to cause an individual or household to lose control of their finances. In this same vein, used as a mechanism to regain control, Chapter’s 7 and 13 bankruptcies has largely become the very last option of getting rid of excessive debt, offering many individuals and households a kind of “fresh start” with their personal finances.

Alas, the bankruptcy option should only be considered when all other avenues have been explored. Consider meeting with a bankruptcy attorney or a reputable not-for-profit consumer credit counseling agency to discuss your short and long term personal financial options.

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