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Were all aware that we here in the the United States of America are stuck in the midst of a terrible financial collapse. Without having to mention this is causing tremendous loss to many Americans. There are an increasing number of foreclosures in addition to rising levels of job loss. As if that wasn’t enough credit card debt is at an all time high. This is leaving behind millions of people in positions with their credit card debt that is very hard to keep up with. At some point people start considering reaching out and getting some help with their debt situations when they come to the realization that there are not very many options on the market to help them. The two most popular of debt relief plans are consumer credit counseling programs sometimes known as a debt consolidation program and debt settlement sometimes referred to as credit card debt negotiation.
The two of these programs do have the ability to get people out of debt much quicker than if they were to just remain on the debt treadmill and continue to make monthly minimum payments. But both of these plans are very different from each other.
A credit counseling program has very lucrative benefits; one being they can normally get the interest rates reduced. Another extremely nice part of this program is that you will make merely one monthly payment to the credit counseling company in which they disperse to your creditors on your behalf; thus making your life much more simple in terms of paying monthly bills. Usually a consumer credit card debt counseling program will take anywhere from 5-8 years to realize debt freedom.
Credit card debt negotiation is a much different kind of a plan. For starters you actually reduce your debt not your interest rate. So you end up saving a lot of money, in most situations the debtor will see a savings of fifty percent or more of what they owe. Another large difference from a consumer credit counseling program is that you will become debt free much quicker with credit card debt settlement, in most cases no more than three years. However there is one downfall, in order for the credit card companies to be willing to negotiate a debt settlement the credit card accounts must go into a delinquent state; the creditors will not negotiate when you’re up to date with the payments. So this does have a adverse effect on the credit score.
The damage done to the credit report will not remain there forever and it will go back up towards the end of the credit card debt settlement program. For the vast majority of folks in credit card debt one of the two plans reviewd above will help. Those folks who have no problem paying their minimum payments right now should look into credit counseling; but those who have huge sums of credit card debt and have a rough time managing to stay current then credit card debt negotiation would be a better plan.