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This following guest article is from: FranklinDebtRelief.com
Consumer credit card debt is a common issue that drains a person’s budget of cash through high monthly payments. Often these high payments cause people to live paycheck to paycheck, and sometimes these payments are so high that people are unable to make minimum payments as required. While credit card debt is common and can wreak havoc on a person’s budget, different people are meeting the challenges of credit card debt in their own way. Debt relief is a popular solution that many people are turning to to help ease their debt burden, but there are different forms of relief available Not all forms of relief are best suited for all people

So how can an individual best determine which option is best? Relief may be found through paying debts off without assistance, through obtaining a consolidation loan, through debt negotiations and settlement, or even through bankruptcy. In order to determine which option is a best, a consumer should consider:
- educating himself or herself about the pros and cons of each option
- obtaining personalized advice from an expert debt counselor
- consider his or her own abilities to pay back debts as well as his or her own credit rating

Many consumers today are able to pay credit card debts off without filing for bankruptcy, and this often includes those consumers who have amasses tens of thousands of dollars of credit card debt.. While debt relief in general can provide great results, often finding the best solution for relief can yield greater results for an individual. Consumers who have high credit card balances today can take the first step in the process and start exploring the options available in more detail today.

This following guest article is from: CreditCardDebtChampions.com

Many people are getting into too much credit card debt, and they are caught spinning their wheels trying to recover from it. The minimum monthly payments just to stay current may become too high, and soon they will begin falling behind in their payments. This may appear to leave them few options which may include defaulting on loans or going through bankruptcy. For these consumers, debt consolidation programs may be the answer and a way to quickly get out of credit card debt. Debt settlement may also be something to consider, but this approach can take longer and affect your credit score even worse.

There are big differences in debt consolidation versus debt settlement. Many people often confuse the two as being the same thing, but there are differences with each program.

Debt Settlement

- Negotiates for a lower balance on credit card bills
- Settlement could be pennies on the dollar
- Negotiation process could take years to settle debts
- Credit report can reflect “settled for less than the full balance”

Debt Consolidation

- Combines all of your debts into one payment
- Generally reduces interest rates
- Helps eliminate late payment fees and over the limit fees
- Debts can be settled in full, which helps with your credit score

Why Debt Settlement May Not Be for You
Debt settlement is a way for people to get out of debt by settling the debt for less than the full balance. However, there are no guarantees with debt settlement programs. First, lending institutions don’t have to agree to settle any debt, and they may insist on getting the full balance. They may continue to maintain this position while you are incurring late fees and over the limit fees, and also while you are approaching default. Lenders may consider a settlement for less than the full amount only after the loan defaults, but your credit score has also taken a big hit by that time. The debt settlement process can also take years to complete, and your credit scores will take years to heal.

Why Debt Consolidation May Work for You
Debt consolidation might be the answer if you are concerned with settling your debt quickly and if you want to save your credit score. A debt consolidation company will work with your lenders to negotiate a payout schedule. They may also work to reduce any fees you have incurred and may also help to lower your interest rates too. The elimination of fees and the lowering of interest rates will help to speed up the process of getting out of debt. Debt consolidation programs involve a debt consolidation company collecting one monthly payment from you and using these payments to pay off your lenders according to a set schedule. While some programs may also help to negotiate for a lower balance, your creditors are generally paid back in full.

Debt consolidation means that you can get your credit score back on track faster because your lenders will report that your account is “current” or “in repayment.” Once this occurs, the healing process can begin and your FICO score will have more time to recover even while you are still making your debt consolidation payments.

The consumer is also the winner because one monthly payment is made instead of several smaller payments that only cover the minimum amount due. Interest rates can be lowered and fees could be eliminated. The best part about it is that you are still paying the debt that you owe and you are paying it in full. This goes a long way to getting a better FICO score in the end.