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Understanding Credit Card Debt- Settlement and Other Options

The average American family has over $15,000 in credit card debt1. Unfortunately, carrying a high balance on your credit cards can be disastrous to your credit and your state of mind. Each month you go without paying off your balance, you’re assessed finance charges, as well as late fees, if you’re unable to make your payments on time. This revolving cycle of debt can be extremely overwhelming. You might feel like there’s no way out. We know that feeling. Many of us at CareOne have faced and overcome our own struggles with debt, including our founder, Bernie Dancel, and several of our employees.

Fortunately, there’s hope. The good news is that there are options to help you work your way out of debt and back on track financially. One option you may want to consider if you have a lot of credit card debt is a debt settlement plan. In some cases, this is an effective alternative to declaring bankruptcy, which most financial experts view as a last resort.

However, a debt settlement plan isn’t your only choice when it comes to managing credit card bills and reducing your debt. If you’ve missed several bill payments, you can’t see a way to pay off your balances, or you’re not sure how to manage your current debt situation, you may want to consider some of the different options for debt relief


Debt Settlement May Help With Your Credit Card Debt


Enrolling in a debt settlement plan to work your way out of credit card debt involves negotiating with your creditors to pay back a portion of your balance. This type of debt relief comes with its own set of issues, and should be considered only if you simply cannot make your monthly payments given your current financial situation. When it comes to using a debt settlement plan as an approach to resolve your credit card debt, you can either work with a reputable debt relief provider, such as CareOne Debt Relief Services®, or you can contact your creditors directly to negotiate repayment of a portion of your balances.

Support and Guidance When You Need It Most

CareOne providers can create a personalized debt relief plan to help you work your way out of credit card debt. Our Certified Personal Finance Counselors® will work with you to understand your financial situation and your monthly budget, so that we can provide you with realistic options for repaying your credit card debt.

The providers of CareOne Debt Relief Services have relationships with many creditors and have helped over 5 million people. A personalized debt settlement plan may be able to help you pay off your credit card debt more quickly and avoid bankruptcy. 

For those who decide to enlist our help, CareOne providers handle the negotiation process for you and manage your escrow account, which is where you deposit funds to pay your creditors. This can allow you to simply focus on getting out of debt and working toward a brighter financial future.

On the other hand, if you choose to manage the process on your own, here are a few tips you may want to consider:

  • Contact your creditors as soon as you realize you have a problem and can’t pay your balance.
  • When negotiating to pay back a portion of your balance, explain to your creditors that you’re having trouble making payments and can’t afford to cover your entire balance now or in the future.
  • Consider your budget to determine a realistic, fair, and reasonable amount you are able to pay to your creditors to cover a portion of your balances. In many cases where a  settlement agreement is reached, creditors will accept either a lump-sum payment or allow you to spread payments over a few months to settle your debts.

Consider All of Your Debt Relief Options Carefully

A debt settlement plan can have an adverse effect on your credit. Because of this, you may want to consider the below options before enrolling in a debt settlement plan:

  • Interest Rate Negotiation: Did you know you can call your creditors and try to negotiate lower interest rates right now? It’s important that you explain you’re not looking to avoid paying your balances; you just need some help from them in the form of a lower interest rate.
  • Debt Management Plan: Another alternative to credit card debt settlement is a Debt Management Plan (DMP). A DMP – such as that offered by the providers of CareOne Debt Relief Services – works differently from a debt consolidation loan. At CareOne, we can work with you and your creditors and design a customized plan to help you repay your debts in full in approximately five years or less. This may also offer significant savings in both interest and repayment terms. Read more about DMPs and the benefits they offer over credit card debt settlement and consolidation loans. 

Learn More Today

If you want to learn how CareOne providers may be able to help you find your way out of credit card debt, call us today at 1-888-694-3328.


1 http://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/

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