Reduce DebtWritten by Jill Morrison
Since debt is a common problem among Americans, there are many options available for reducing or even eliminating large amounts of debt. Debt can be acquired in many different ways. The most common type is credit card debt, with loans taking a close second place. Those who have acquired large amounts of debt should immediately stop spending and start making efforts to reduce their debt amounts. Paying more than the minimum monthly balance on cards is the first step, and eliminating debt on cards with highest interest rates should be a priority.
Methods for Reducing Debt
Depending on the type of debt that has been acquired, there are a few different options that can be used to solve financial problems. In the case of credit card debt, many will choose to transfer balances to zero or low interest credit cards. This method is a good option if balances can be paid off quickly. Oftentimes, the zero or low interest rates on credit cards expire after a certain number of months. If balances are not paid off by this time, harsh penalty fees and rates may be applied, exacerbating the problem.
Whether people are suffering from debt due to credit cards, loans, or other reasons, debt settlement companies are a great option for reducing debt. Debt settlement companies can negotiate with creditors and financial institutions to drastically reduce total debt amounts. They are also beneficial in extending pay-off times, eliminating charges or fees, and reducing interest rates. With debt settlements, monthly payments can be cut down by as much as 60 percent, so you can pay off debts more quickly and easily.
Debt consolidation loans are another option for solving debt problems. They are used to consolidate all bills into one total amount so it can be paid off in its entirety. Debt consolidation loans have some similarities to debt settlements, such as lowering pay-off times and interest rates. However, they do not reduce total debt amounts like debt settlements. Debt consolidation loans are also risky because they are taken in the form of home loans. Therefore, those who do not make payments on time could risk losing their homes.