Credit Card Debt Relief Programs - Credit Counseling Services Vs Debt Settlement Programs

Credit Card Debt Relief Programs - Credit Counseling Services Vs Debt Settlement Programs

Two of the most popular credit card debt relief programs are credit counseling and debt settlement. Both of these options can make financial sense but which one makes the most sense for you. Here we will take a look into how these credit card debt relief programs work and when to consider them.

Credit counseling services are intended for individuals and small businesses with several high interest credit card balances. Instead of paying all these credit card balances back separately, credit counseling programs combine all of the balances and allow you to pay them back with one monthly payment at a lower interest rate. Just a few percentages lower in interest rates can save you a lot of money over the years therefore this option has been particularly attractive for those with high interest credit cards.

The monthly payment to the credit counseling program will typically be the sum of all your minimum payments therefore you must be able to currently meet your payments to enter a credit counseling program. It is very important that you can comfortably meet this payment every month because credit counseling services are notoriously strict for kicking consumers out after just a few missed payments.

If you can't afford or are struggling to meet your monthly payments on credit card debt then a debt settlement is probably your best option. Debt settlement allows you to eliminate 40-60% of your unsecured credit debt while paying back the rest in one lump sum or monthly installments. This option is intended for consumers that are on the verge of bankruptcy and are experiencing a financial hardship.

Debt settlement is seen as a legitimate alternative to filing bankruptcy. If you have over $10,000 in unsecured debt and are experiencing a financial hardship then a debt settlement can make financial sense.

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