Offers Consumers Tips For Credit Card Debt Reduction

July 28, 2009 (PRLEAP.COM) Business News
The debt management pros at educate consumers on all of the options available to them to get out of debt. They help consumers make the most informed decision possible so that consumers can get their financial lives back on track.

Credit card debt relief can be reduced through lower rates and/or negotiating with creditors for reduced balances. With reduced interest, consumers can pay off the principal quicker with the same monthly payment. A synopsis of these debt relief methods available to all U.S. consumers is as follows:

1. Transfer Balances

Credit card companies are always offering introductory deals, such as 0% on transfers. Usually such offers last for several months, giving consumers the chance to make sizeable payments on their principal.

If a consumer has several credit cards, they should choose to transfer the account with the smallest amount. Pay off that account, then take that card's monthly payment and apply it to their next lowest balance. Soon they will be creating a snowball effect, swiftly lowering their debt. Consumers should make sure to close paid off accounts to raise their credit score and keep from adding to their debt.

2. Negotiate Lower Rates

Credit card companies are also willing to lower rates. Consumers can try to do this on their own, but they will have more success with a debt management company. For a monthly fee, they will lower rates with credit card companies and handle your monthly payments.

3. Debt Settlement

Debt settlement can be the most effective method for consumers to lower their credit card debt. A debt settlement company can settle consumer debt with creditors, often times for up to 50% of the original amount owed. Reducing credit card debt will have long term benefits for consumers. Less credit means better rates when a consumer wants to apply for financing, especially with a home or car purchase. No matter which option consumers choose, research companies carefully and compare their services and fees.

4. Debt Consolidation

Debt consolidation is the process of taking existing high interest rate debt, and combining it into one low interest rate monthly payment. This type of program is not about taking all of one's debt and putting it under another loan; it is only about taking the high interest debt and putting it all under one low monthly payment. If some of a consumer's debt already benefits from a low interest rate and good loan terms, then there is no need to change that arrangement. A debt expert can discuss one's options and work to develop a plan that will help consumers get their monthly obligations under control.