Credit Card Debt Relief

2007-03-08 10:33:40

( Financial )



Causes of Credit Card Debt Burdens

Like any well-meaning bank customer, you want to have a clean slate when it comes to paying for your credit card obligations on time.

However, there may be unavoidable circumstances which may cause either a temporary or permanent dent in your credit card payment record.

Losing your job, a change of status, or unfortunate events such as fire, disaster or an accident can affect your ability to generate income to pay for your financial obligations.

The card company is indirectly a culprit because it allows you to pay only a minimal amount of your outstanding balance. This is actually a marketing gimmick in which the card company earns interest income from your balances. But on the other hand, you get a false impression that the card company is lenient, so you tend not to pay the entire balance. Since interest charges continue to accumulate on the remaining balance, your credit card liabilities could reach an unmanageable level before you know it.

Ways to Get Credit Card Debt Relief

If you are maintaining several credit cards with different card companies, make a priority to pay off the one with the highest annual percentage rate first. Then give yourself a timetable to pay off the balances on the other cards. Avoid using your credit cards for the meantime as you pay off your old balances.

Some credit card companies offer special arrangements to consolidate your credit card debts. You get credit card debt relief by deferring your payments, which are then amortized over a period of a few months. The only disadvantage of credit card consolidation is that the outstanding balance will also block off a part of your available balance and limit the use of your card.

Another form of credit card debt relief is to negotiate for a credit card debt reduction directly with your card company or employ the services of a debt management firm. For a minimal service fee which is usually a percentage of your outstanding debt balance, the debt management firm can arrange for lower interest charges, deferred payments or even permanently reduce your outstanding balance. Credit card debt reduction is possible if you can prove financial hardship or by filing for bankruptcy. You may also want to seek legal advice because credit card debt help companies will only act as negotiators on your behalf but cannot really force the card company to accept any new credit card debt reduction proposal.

The best way to get out of credit card debt is to prevent yourself from using your card in the first place.


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