How to Greatly Reduce Your Credit Card Debt

There is virtually no American consumer who does not carry some credit card debt. Statistics reveal that the typical household in the United States carries somewhere in the neighborhood of $10,000 of this form of indebtedness. The lure of the credit card is easy to understand: emergency expenses, the little something extra that is not allotted in the budget and the spontaneous purchase all make the use of these cards quite attractive. Of course, seeing that some credit card companies charge consumers between 20% and 30% in interest rates for the privilege, this is not the kind of financial tool that lends itself to long term financing.nnUnfortunately, the sheer amount of indebtedness that Americans carry has turned the short term loan into a long term financial obligations that seems to only decrease by single digit amounts rather than double or triple digit figures. Defaults on credit card debts are increasing, and while consumers make tough choices between paying the loan on a secured asset, such as a car or home, versus on an unsecured debt that will not result in a loss of consumer goods, they fail to realize that there are serious ramifications for consumers who fail to pay up on time. First and foremost, credit card issuers are beginning to now sue consumers for the outstanding amounts and this leads to judgments, garnished wages, and of course heavily damaged credit profiles.nnMoreover, the sheer stress of having to deal with dunning letters and phone calls by bill collectors makes it hard to deal with the debts. There is a way to get out from under oppressive debt and also stop the phone calls and the letter, as well as the danger of court action. With the ultimate goal being financial freedom, the two most commonly traveled roads are either the services of a debt settlement negotiator or a debt consolidation loan originator.nnA debt settlement organization is staffed by professional negotiators who take all of your credit card indebtedness and then devise a workable repayment plan. This plan is then taken to the credit card companies in an effort to get the lenders’ approval to make this plan happen. This may include lowering interest rates, forgiving part of the balances, and also reversing late fees and other penalties. The debtor makes one lump sum payment to the settlement agency which will then send the agreed upon monies to the individual creditors.nnDebt consolidation loans, on the other hand, are usually second mortgages or otherwise collateral backed personal loans that you may take out with the express intent of paying off the outstanding credit card balances. This can greatly reduce your interest rates, but it will not necessarily allow you financial freedom in a short period of time. On the flipside, there is not adverse notation to your credit file and you will be able to continue on using your credit cards, if you so desire. Consumers should think long and hard what their fiscal situation warrants, and whether debt consolidation or debt settlement negotiations are the right way to go to achieve financial freedom.nnIn order to find out more about credit card debt settlement, you can visit our site: nwww.debt-settlement411.com.