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The holiday season is approaching, but for many Americans, the excitement is overshadowed by their problems with increasing credit card debt. Currently, the average person owes almost $8,000 on their credit cards and this is happening at a time when economic challenges, like the inflated prices of housing, groceries and gasoline, are pushing many household budgets to their limits. This perfect storm of high credit card balances and budgeting challenges has created a worrying debt cycle it’s difficult to free yourself from it.
What makes the situation particularly difficult is the current state of credit card interest rates. Despite positive developments in other lending markets, credit card APRs have remained stubbornly high, on average around 23%. This makes credit card debt one of the most expensive forms of debt, as the compounding nature of interest and high rates mean that any revolving balance you hold becomes more and more expensive each month.
If you’re struggling to meet your credit card obligations this November, you’re not alone in this challenge. Many cardholders have late on their bills Recently, and while missing payments can lead to serious consequences – ranging from damaged credit scores to compounded late fees – there are several strategies available to help you regain control of your financial situation.
Take steps today to get rid of your high-interest credit card debt.
3 Debt Relief Options to Consider in November
If you’re behind on your credit card obligations this month, these strategies could help you get back on track.
Find out if you qualify for issuer-based relief
If you are experiencing temporary financial difficulties, contact your issuer can be a useful first step. Many card issuers offer assistance programs for customers facing difficult economic situations, such as job loss, medical bills or other unexpected expenses. These programs vary by issuer but generally involve temporarily reducing interest rates, waiving fees, or establishing a lower monthly payment plan.
For example, some hardship programs may allow you to pause payments for a set period of time or reduce your monthly minimum until you are in a better financial situation. This not only helps avoid late fees and penalties, but also prevents your credit score from taking a significant hit. However, it is essential to reach out as soon as you anticipate difficulties. Waiting after a missed payment can make it more difficult to negotiate favorable terms.
Before enroll in a hardship programhowever, make sure you understand the terms and conditions. While such programs may offer short-term relief, they may come with tradeoffs, such as temporary restrictions on new purchases.
Find out now what help a debt relief agency could offer you.
Use one of your debt relief program options
If a hardship program is not enough to meet your needs, a debt relief program might offer the help you are looking for. While there are a wide range of debt relief strategies, two of the most popular options are debt consolidation programs and debt settlement programs.
With a debt consolidation programyou get a debt consolidation loan thanks to a debt reduction agency third-party lending partner to pay off your existing credit card balances. The advantage? You’ll only make one monthly payment at a potentially lower interest rate, which could save you money and simplify your repayment process. Additionally, these partner lenders generally have less restrictive borrowing parameters, so it may be easier to borrow under these programs.
Another option is a debt cancellation (i.e. debt settlement) program. These programs aim to negotiate with your creditors to reduce the total balance you owe, often by a significant amount. In many cases, your balance could be reduced by 30% to 50% or more, making it easier (and cheaper) to pay off what you owe.
Get low-cost advice from a credit counselor
For those looking to regain control of their finances without taking on more debt or dealing with creditors, working with a credit counseling agency can be a smart move. Credit counseling agencies offer low-cost or even free advice on budgeting, managing debt, and adopting better financial habits — and can help. make a plan to manage and reduce your debt.
A popular service offered by credit counseling agencies is a debt management program. With this type of program, the agency works with your creditors to lower your interest rates and create a repayment schedule that you can manage. You will make a monthly payment to the agency, which will then distribute the funds to your creditors. This can streamline the repayment process, reduce interest charges, and help you pay off your debt faster than if you made minimum payments.
The essentials
Missing a credit card payment can seem overwhelming, but it doesn’t have to derail your financial future. By exploring your options, such as relief programs, debt relief solutions, and credit counseling, you can find a path that fits your financial situation and helps alleviate the burden of credit card debt. The most important step is to act early, because addressing the problem before it gets worse can prevent additional financial stress and help you regain control of your finances.
