Credit Card Debt Assistance

Millions of American households are in urgent need of credit card debt assistance. According to helpwithmycredit.org, families owe an average of $8,000 to $10,000 on their card. Non profit debt help can help get personal finances back under control.

Credit Card Debt Assistance

Non profit debt help not only provides budgetary assistance, they can also help the client to become debt-free through a Debt Management Plan or debt settlement program. These work by achieving a reduction to the amount owed and/or greater affordability. Whilst this reduce the client’s FICO credit score, most individuals have little to lose as they have already missed payments.

Budgetary Help and Assistance

The most effective way to deal with unpaid credit card debt is by reducing the amount spent each month or by finding a way to make extra cash. Unless income and expenditure balance, it is necessary to borrow money to bridge this gap. Non profit debt help is provided through a through a budgetary analysis by a specialist advisor. If sufficient savings cannot be found, they will recommend a debt relief program.

Low Interest Debt Consolidation Loan

Those with a good FICO credit score may be able to consolidate debt with a loan. Credit card debt assistance comes from being able to enjoy a lower rate of APR, spread repayments over a longer term and reduce monthly repayments. Whilst consolidating debt with bad credit is possible, it won’t be as effective as the interest rate will be significantly higher.

Debt Management Plan

Once it has been established how much disposable income is available, a repayment proposal will be sent to creditors. A total of 15% of each contribution will be taken as a management fee. The debtor will send a single monthly payment to an intermediary and they will ensure that the correct amount is sent to each creditor. The majority of creditors will be prepared to stop charging further interest and charges.

Debt Settlement Program

Following a negotiation process, credit card debt assistance will be provided through a 50% reduction of up to the principal. Any remaining unpaid credit card debt will be cleared over a period of 12 to 36 months. Whilst the term of a debt settlement program can be extended, the offer is less likely to be accepted by creditors. The administrative fee is the same as it is for a Debt Management Plan.

There are a number of fruitful ways to get credit card debt assistance. It is always advisable to seek non profit debt help as they will be able to determine whether budgetary help, a low interest debt consolidation loan, debt settlement program or Debt Management Plan is the right option.

Sources

Willis, Gerri. (April 16, 2009). “Help with credit card debt.” CNN Money.

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