In the 1980s, credit cards were something of a status symbol.  Today, having a credit card is the norm for any average working adult.  Unfortunately, the popularity of credit cards has led to an increase in the number of people who need to eliminate credit card debt.  This isn’t a problem for the average credit card user, but a number of people have amassed debt that they cannot possibly pay off on their own.  However, an informed consumer can be one step closer to accomplishing this goal.

There are many challenges that a person can face when attempting to eliminate credit card debt.  The first of these challenges involves the Annual Percentage Rate (APR).  Often a company will attempt to entice new borrowers by offering a starting low interest rate.  However, the first time a bill is paid late, the credit card company has the right to significantly increase the APR.  Paying late multiple times can result in an incredibly high APR, which in no way helps the borrower eliminate credit card debt.

Trying to eliminate credit card debt when a hefty APR is involved is very difficult, especially if only the minimum payment can be afforded each month.  As the APR continues to increase the principle balance by adding interest and late payment fees, the opportunity to pay off the debt in a timely manner begins to decrease.  In order to start seeing any debt relief, or to eliminate credit card debt, it is important to always pay these bills on time.card debt,

Some people choose to put off paying their credit  and focus on paying other debts instead.  They remain timely on other bills, but do not realize that to eliminate credit card debt first is actually the smarter choice.  The APR on a delinquent credit card is often much higher than on any other type of debt.  It is better to only pay the minimum payment due on a credit card than to not make a payment at all. 

To eliminate credit card debt, it may be necessary to seek outside assistance to pay off bills.  This debt relief can come in two forms. 

The first way many choose to eliminate credit card debt is through bill consolidation.  Consolidation is when an outside lender combines various credit card balances into one bill.  This can be to the advantage of the consumer in that there will only be one due date per month, once the consumer has chosen consolidation.  Often, bill or debt consolidation also means a lower monthly payment, than what the payment would be if the consumer were paying each credit card bill separately.  This option alone can provide consumers a significant credit card debt solution, when they are truly seeking to eliminate credit card debt.    The other advantage to bill consolidation is that the lender will often negotiate with credit card companies to get a lower APR.  This allows the borrower to pay off the total debt a little faster and save a lot of money on interest over the term of the loan.  Securing a lower interest rate will definitely help eliminate credit card debt quickly.

Many people choose credit settlements as their choice credit card debt solution.  To eliminate credit card debt with this method means that a lender works with each credit card company to come up with a settlement amount that would pay off the credit card now.  This is appealing to many creditors because, even though they get less money than they are owed, they get the money immediately. This solution guarantees that the account won’t go into default (where the creditor might not get paid back at all).  Once a price has been agreed upon, the settlement company will pay off the total debt on the customer’s behalf.  The borrower will then make one monthly payment to the credit settlement company until the balance is paid in full.  This is a very effective method to eliminate credit card debt.

There are advantages and disadvantages to both methods.  With consolidation, the principal balance does not decrease, but the APR usually does.  However, with bill consolidation, a Third Party Administered (TPA) mark may appear on the borrower’s credit report and remain there for ten years.  This mark does not mean a person has a bad credit report.  On the contrary, a TPA just shows that a person who once needed credit card debt help acted responsibly and received aid in finding a credit card debt solution. 

The down side to working with a credit card settlement companies is that they are not federally insured like credit card companies.  If the settlement company is a reliable one, this can be a great method to pay off bills.  However, a less reputable company might attempt to deceive its clients by using a variable APR or in other ways.  Since many settlement companies are not insured, there may be very little recourse for the borrower in case of fraudulent activities by the lender.

Credit card debt is a growing problem in the United States.  Fortunately, consumers in need of help can find debt relief through various methods.  No matter what course is decided upon to eliminate credit card debt, it is important to stick to the plan and plan for the future.  The only thing worse than having to eliminate credit card debt is to have to eliminate credit card debt a second time.