Credit Card Debt Reduction Programs

Credit Card Debt Reduction Programs

Credit Card Debt Reduction Programs

It seems like the more credit card debt you have the more offers there are to enter into a debt reduction programs. But how do you know if these reduction programs are helpful or might get you into a deeper hole. Sometimes these companies get you to enter into debt reduction programs that are nothing more than rolling your debt into a high interest loan, that does reduce your payments, but doesn't reduce your debt, in fact adds to your overall debt, albeit not your credit card debt.

You have to be careful, there are a lot of fly-by-night companies some of them get you to pay fees upfront and then you never hear from the company again or they give you the run around. Also, don't be so quick to give your checking account or bank information over the phone for an electronic debt, sometimes they will charge you a monthly recurring fee, that you might not be aware of which could cause more financial trouble than your credit card debt.

Most credit card debt reduction programs are pretty much just another name for a credit card settlement or a credit card debt negotiation program. Most programs assign you a caseworker who works with you to reduce your over all credit card debt. Most of the time they work out a settlement with your creditors that typically reduce your overall credit card debt to 60-70% of what you actually owe.

While this does offer some immediate solutions and a great deal of benefits, you need to be aware that you probably aren't eligible to enter into a credit card debt reduction programs until you are in default. It is better for you to jeep your payments up to date, however if you do get behind a debt reduction program is an alternative that is better than continuing in default or declaring bankruptcy.

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