Get Out of Credit Card Debt

The national recession has had a profound impact on the finances of many Americans, and as a result, some have seen their credit card debt grow to the point it's become unmanageable.

For these people, there are several ways they can get out of credit card debt and get their finances back on track within a relatively short amount of time.

The simplest but most lengthy solution for a consumer to get out of credit card debt requires an increase in the amount of the monthly payments for their credit card bills and to dramatically decrease or cease using the credit cards altogether. A lot of consumers have already begun to do this effectively, curbing their spending and dedicating more of their paychecks to get out of credit card debt.

People who cannot afford to increase their monthly payments to get out of credit card debt may benefit from working with a credit counseling service that can suggest a debt management plan that could help pay off your debt within four to seven years. Although this method is not as quick, many counselors make consumers devote considerable time to a financial education process that will also help draw up a sound financial budget and eliminate unnecessary expenditures to further decrease their debt.  In a credit counseling program, consumers will pay back every dollar of the principal they owe, but at a lower interest rate.

But some consumers may need to take more drastic measures to get out of credit card debt. In this case, they may benefit from using a debt settlement service. With this method, a consumer enlists the help of a company that specializes in negotiating with lenders to help them reduce their debt.

Debt settlement is the process of negotiating with creditors to achieve a payoff amount that is a substantial reduction to the current balances that are owed.  Creditors are very willing to negotiate on debt balances that are in arrears, because if a consumer were to file bankruptcy, they stand to get nothing.  In order to succeed in such a program, consumers need to diligently save the funds that are required to make settlements, which typically run around 50 percent of the total current balances and last between 24 to 48 months.

While no reduction process is going to be easy, there are great companies that can help you get through a tough spot. Whatever option a person chooses to get out of credit card debt, they should always thoroughly research the method beforehand to ensure that it's right for their unique financial situation.