Credit Card Debt Elimination

Credit Card Debt Elimination

Have you heard the latest on the credit card scene? Currently, if you have outstanding credit card balances, your required monthly minimum is about 2% of the outstanding balance. But credit card companies are getting ready to raise that amount to 4%. You can look at this one of two ways, depending on your situation. On the one hand, you'll get your credit card debt paid off sooner. But for people who are barely making ends meet as it is, doubling the required monthly minimum is putting them one step closer to financial disaster.

Credit Card Debt Elimination

For those in the latter situation, credit card debt elimination may seem like a pipedream. But there are programs designed to help you get out of debt. Thesecredit card debt elimination programs come in all different forms. Here's a brief outline of a few of the more popular credit card debt elimination programs:

Debt Consolidation - A credit card debt elimination program that involves negotiation to get your unsecured debt balances and interest rates lowered. Then the new, lower balances are combined and you make one monthly payment to the debt consolidation company, which they distribute among your creditors. Because of the reductions, you can become debt free in about five years.

Debt Consolidation Loan - A loan given to you to pay off your unsecured debts. You pay off your unsecured debts immediately, but you still have the loan to pay back. The benefit is that the interest rate on the loan is so much lower (generally half of what you're paying now) and you can have it paid off in five years or less.

Debt Consolidation Mortgage - A credit card debt elimination program that allows you to borrow from the equity in your house to pay off your unsecured debts. Your payment is combined with your mortgage, and you get the same interest rate as your mortgage. In some cases, the interest is even tax-deductible (check with your tax advisor to see if this will work for your tax situation).

Debt Settlement - This type of credit card debt elimination program allows you to pay off your credit card debt at pennies on the dollar (usually 30-50 cents on the dollar, to be exact). Generally, you have to have the money all at once, but some debt management companies will give you one to three years to pay it off.

To find the right credit card debt elimination for you, contact a debt management company.

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