Credit Card Debt Advice

credit card debt advice

These days it is impossible not to notice the debt relief ads that seem to have taken over the marketing space in almost all of the major advertising mediums. From TV, radio, Internet, newspapers, even buses and billboards. These ads, each offering what they have deemed to be good Credit Card Debt Advice, would not be there if there was not such a huge debt problem in this country.

The problem for consumers is that all these solutions are very confusing. Each solution pitched seems to position itself as the answer for every debt situation. Logically this can’t be true, but where can consumers turn for advice about the differences between the major debt relief solutions offered?

Logical Credit Card Debt Advice

Your Options Explained

The first step to getting out of debt is to understand the options that are available to you. All of the advertisements that you see will typically be offering 1 of the following 4 main debt relief options.

For a consumer looking to pay off their credit card debt, the best advice we can offer is to make sure that you understand these options and the differences between them.

Debt Consolidation Loans

Although Credit Card Debt Consolidation Loans are very difficult for consumers to get these days, if you can secure one at a much lower interest rate than you are currently paying, it will save you some money in the long run. The concept is simple. If you are currently paying an average interest rate of 20% and you can find a loan at 12%, you can payoff yourhigh-interestt rate loans and consolidate them into one monthly payment at a lower rate.

Consumers looking for the Best Debt Consolidation Loans typically have better luck applying for a loan from a peer to peer lending network like lending club rather than going to a traditional bank.

A debt consolidation loan is a good option if you can find a loan, have great credit, but high interest rates and can easily afford the monthly payments. Unfortunately, this doesn’t describe the situation of most families in America today.

Consumer Credit Counseling

For consumers who are unable to secure a debt consolidation loan, they will next typically look at a consumer credit counseling (CCC) program for possible help. A CCC program does not offer consumers a new loan. Instead, they will negotiate a lower interest rate with your existing creditors in an attempt to have more of your monthly payment apply to the principle.

Some of the benefits to a CCC program is that it allows you to consolidate all of your payments into one payment and will usually have your debts paid off in about 5 years. Also, you will typically pay less money overall if you currently have high interest rates with your creditors.

Some of the drawbacks to a CCC program is that the monthly payment is not flexible, and often times it can be higher than the minimum payments you are making currently. Compared to a debt settlement or bankruptcy, a CCC program is not as damaging to your credit report, but it will show up on your report that you are enrolled in a CCC program and your credit cards will be closed.

A CCC program is typically a good option for consumers who are current on their credit cards, can easily afford the monthly payment and should have no problem doing so for the next 5 years, but just want to consolidate their payments, lower their interest rates and see some light at the end of the debt tunnel. If you are currently or foresee a time when you will be struggling just to make your minimum payments, a debt settlement option should definitely be explored.

Debt Settlement

If neither of the above two options make sense, and a consumer either can’t qualify or wishes to avoid a bankruptcy filing, then a debt settlement approach is a good option to consider. Debt settlement is not a loan or a program to reduce your interest rates.

With a debt settlement strategy, you attempt to negotiate the principle debt down to less than the full balance. Under the right circumstances, lenders do agree to accept less than you owe to satisfy the debt in full.

Some of the benefits to a debt settlement approach are that you could be out of debt for much less money and in a much faster time frame than with either a debt consolidation loan or a credit counseling program. It is a much more flexible option in terms of your monthly cash flow. It provides an opportunity for consumers who can’t afford their minimum payments to potentially avoid a bankruptcy filing.

Some of the drawbacks to a debt settlement approach are you will not pay your creditors until you have enough money to settle the account with them. Because of this, you will take a hit to your credit. If it takes to long to raise the funds, there is a potential for legal action. You will very likely be contacted by your creditors asking why you have not paid them.

A debt settlement approach is a great option to research if you are currently struggling to make your minimum monthly payments or have already fallen behind. Getting out of debt is more important to you than protecting your credit score over the next few years. You do have the ability to pay something toward your debt and you either can’t qualify or wish to avoid filing for bankruptcy.


Most consumers are familiar with this option and inherently wish to avoid it, although, sometimes this can certainly be the best option. With consumer bankruptcy there are two main chapters to look at, Ch. 7 and Ch.13.

A Ch. 7 is what most people think of when they hear the word bankruptcy. A Ch. 7 will typically wipe the slate clean and give you a fresh start. Depending on your income and assets, you may not qualify for a Ch. 7 filing and may need to file a Ch. 13.

With a Ch. 13 bankruptcy, instead of wiping the slate clean, you will typically enter into a repayment program over a 3 to 5 year period.

Since all states are different and there are many factors that go into determining which chapter you could qualify for, it is best to meet with a qualified bankruptcy attorney licensed in your state to determine if a bankruptcy is the best solution for you.

When it comes to credit card debt advice, the most important thing to take away from this article is to be sure and research each option in detail so that you can determine which strategy will provide the best overall solution to your debt situation.

At Pacific Debt, we help consumers settle their debts with creditors on a daily basis. If you think that a settlement approach might be right for you, feel free to contact us for a free debt settlement evaluation. We don’t charge a dime until we can settle your debt, so if you are not a good candidate for a settlement approach, we will help you figure out what is.

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