Credit Card Debt is the top personal debt type in the United States. Although the nationwide average for credit card debt dropped 4% at the end of the year 2010 in comparison with the year before, some metropolitan areas experienced sharp increases within the same time period, as reported in a report from Experian.
Once heavily burdened by credit card debt, many individuals decide to use debt consolidation companies which lay claim they’ll work with your creditors to reduce the total amount you will owe. But BUYER BE WARE: Debt consolidation/settlement companies have earned a negative reputations through the years. It’s much more secure and beneficial to pay-off your credit balances on your own.
What do debt consolidation/settlement companies do?
- They claim to negotiate a lower interest rate with your credit card company.
- All your credit card debts are consolidated therefore you pay only one monthly payment.
- Most of the plans are approximately 5 years.
- A percentage of your monthly payment goes to fees charged by the debt consolidation/settlement company. This is a high risk approach to paying off credit card debt.
Getting out of credit card debt is one of those things you have to do yourself. By outsourcing the process, you miss out on the lessons you should be learning. Which include; how you got in this trouble in the first place. Once all the debt is paid off, chances are, you will incur more debt because of a lack in behavior change.
Also by doing it yourself, you can save money on fees and as you progress, you will gain momentum which will propel you forward as you continue to payoff your debt.
Have you ever used a debt consolidation/settlement company?