Are you drowning in debt? Are you struggling to make ends meet and pay off your debts? The good news is there are a number of credit card debt relief programs to help you, regardless of the situation you’re in. For your convenience, we’ve looked at the three most common strategies to help get you out of debt.
Often a problem shared is a problem halved, even when it comes to debt. Credit counseling agencies will look at your finances and discuss ways to move forward. One of the ways they do this is by helping you with a debt management plan or DMP. You usually make a lump payment to the agency who then pays your creditors.
There are two strategies for debt payment: the “snowball” and “avalanche”. Both work in a similar way where you choose one loan or credit card to make additional payments on so you can pay it off completely while making minimum payments on your cards. The snowball approach means paying off the loan or card with the lowest balance first. The avalanche method, on the other hand, suggests you pay off the card with the highest interest rates attached, reducing the total interest you have to pay.
A Consolidation Loan
With a consolidation loan, you take a low-interest loan to pay off all your high-interest credit cards and loans. What this means is you only have one payment per month, with lower interest. The upside is having several paid accounts, but adding a new loan could be a potential risk.
Credit card debt relief programs offer people workable solutions to get out of debt, but it’s important you understand the options available, and the one that will work the best for you.