The economy is a major factor in determining the amount of debt most people get into. In order to make up for fewer work hours or getting laid off, people will often take out more and more credit cards to pay bills on time. The issue with this approach is that eventually you rack up so much debt, you need to start looking into credit card relief options. Some of the options available will hurt your credit rating immensely, and others will barely leave their mark. Here are four ways to achieve credit card debt relief:
If you’re looking to get rid of a high-rate credit card, the best way to go about it is to consolidate your debt. What that basically entails is getting a loan to pay off your most expensive credit cards. This may not get you out of debt entirely, but it can save you money if you can apply for a fixed interest loan.
2. Seek Counseling
Credit card relief can often come in the form of calling a credit counseling company. The company will work with you to come up with a better way to pay off your debt. This in and of itself doesn’t hurt your score, but if you use the company to make payments on your behalf, it may be noted through FICO.
3. Debt Settlement
Credit card organizations don’t typically deal with a consumer directly in order to negotiate a debt settlement, unless the account has reached collection and severely past due. Even if you do reach common ground with creditors, it will still be noted on your report that the balance wasn’t paid in full. This is one method that hurts your credit rating a great deal.
4. Filing Bankruptcy
It’s a known fact that filing for bankruptcy will hurt your credit the most. With that being said, if you have no other options, it may be your best bet. Some forms of bankruptcy, such as Chapter 13 don’t hurt your credit as much since you’ll still be paying off your debt over the course of a few years.
There’s no foolproof way to get debt relief unless you can somehow make payment arrangements. The best way to go about getting back on your feet is to know all of your options. Hopefully, the above four methods have helped you come to terms with your current situation.