Advice on how to get out of credit card debt - The Bills.com Blog

the loan page and find a loan that meets your needs.

2. Roll-up to Pay off Your Credit Card Debt
If you have sufficient income to pay more than your monthly minimums, you may be able to pay off your accounts through planned repayment - also called a 'roll-up' strategy. First, you should carefully review your finances to cut expenses wherever possible, to free up as much cash as possible to apply to your debts. While you will continue to make the monthly payments on all of your accounts, you will pay all excess cash to your highest interest account to pay it off as quickly as possible. Then do the same with your next-highest interest card, until that account is paid off. Continue this process until you have succeeded in paying off all of your credit cards. Depending on how much above the minimums you can pay each month, this method may rid you of your debt in a matter of years, save you thousands in interest, and preserve your good credit history. If you cannot afford to pay any more than your minimums, you may want to seek the assistance of a professional organization, such as a debt settlement or credit counseling firm.

3. Consumer Credit Counseling
CCCS companies offer numerous services, such as financial counseling and budget planning, as well as Debt Management Plans (DMPs). In a DMP, the CCCS would arrange a new payment amount with each of your creditors, usually based on a reduced interest rate. You would then make a single monthly payment to the CCCS which would distribute the funds to your creditors, based on the new payment amounts. There are several drawbacks to CCCS, though.

First, depending on your creditors, it may not be able to reduce your monthly payments enough to improve your financial situation. Second, it is likely to have a negative impact on your credit score, so you may not wish to enter into a DMP if you anticipate any large purchases, such as home or an auto, in the near future. Third, the average DMP takes around five years to pay off your debts, so you must be willing and able to commit to a long-term repayment plan.

4. Negotiated Debt Settlement
Another great option to consider is the services offered by reputable debt settlement firms. Rather than making monthly payments to your creditors, these programs negotiate lump sum settlements with your creditors, frequently reducing your debts by 50% to 60% of your principal balances. These programs usually take only 2-3 years to complete, so this is a good option for many people to rid themselves of debt in a fast manner. In many cases they can also reduce your monthly payment toward your debt - sometimes cutting your monthly payments in half. There is one major drawback to debt settlement programs, though ?they will damage your credit while in the program and for at least a year or two afterwards. However, if you are currently unable to afford to pay your creditors, the hit to your credit may be worth the benefit of riding yourself of credit card debt.

I also encourage you to explore the Debt Help section of Bills.com. There, you can learn more about the options I have described above.

I hope that this information will help you Find. Learn. Save.

Best,
Bill
www.bills.com

Also, make sure to get a free financial health check-up with Bills IQ!