Debt Settlement For Credit Card Debt–Should Consumers Use Debt Relief Companies?

Credit card debt is a problem for numerous consumers and, as a result, more individuals are turning to debt relief companies in order to erase various debt obligations from credit cards or deal with creditors to find more affordable repayment solutions. While there are reputable debt settlement companies which can help cardholders find the affordability they need, consumers are also cautioned to heavily researched any debt relief company which may offer to help with their credit card debt situation.

Obviously, fraudulent companies have taken advantage of consumers in the past and have either charged cardholders an excessive amount of fees, which may offset any benefits from debt relief that could have been gained, or simply took money from cardholders and offered little or no assistance.

Yet, consumers, according to some, may not even require the use of debt relief companies as many could be able to work with their creditors directly. While it’s true that reputable debt settlement companies can negotiate with creditors on behalf of a cardholder and offer more affordable payment plans or get a percentage of a consumer’s debt canceled, there are arguments that consumers may have success by simply dealing with their credit card provider directly.

Depending upon a cardholder’s situation, either having debt forgiven or simply finding a more affordable interest rate, repayment plan, or term extension, some cardholders have been able to work directly with creditors to achieve these goals. Understandably, cardholders typically do not want to default on these unsecured debts, as they could have negative effects on one’s credit score, but in cases where a cardholder’s situation is severe, credit card companies have been helpful when dealing directly with consumers in the past.

As to whether a consumer should use a debt relief company is, according to many financial advisers, both a personal decision and should be based on one’s debt situation. There are nonprofit credit counseling agencies which may be able to offer assistance without a cardholder paying a fee, but debt relief companies have also aided cardholders over the past months when it comes to reining in debt on their credit cards which is simply beyond their means to repay.