Credit Card Debt Elimination

Written by Kevin Tavolaro
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Debt elimination is a concentrated method for fighting credit card debt. Other techniques for dealing with credit card debt, such as debt consolidation, help you organize all of your outstanding debts into one sum, subject to a single interest rate. You then start to pay off the combined debt in regular monthly installments. Although this approach can help you gain control over your debts, it can take many years before fully resolving the problem. Debt elimination agencies attempt to get you out of debt much more quickly by negotiating with your card provider to get a reduced balance, which you would be able to pay off in a reasonable amount of time.

Benefits of Credit Card Debt Elimination

Although paying a reduced balance is usually quite detrimental to your credit report, supporters of debt elimination argue that it is still a more effective alternative to debt consolidation. While you ultimately pay off all of your balance via debt consolidation, the process can also have a negative effect on your credit. Debt elimination supporters argue that, if both approaches can harm your credit rating, your best move would be to choose elimination, as it will clear your debt more quickly, leaving you free to work on restoring your good credit. However, depending on the amount of debt eliminated, the repercussions of debt elimination can be seen on your credit report for as long as seven years.

No matter what type of plan you use to deal with excessive credit card debts, your credit rating will most likely be effective. In fact, anything you do, other than maintain monthly minimum payments, is sure to somehow reflect on your credit report. This is why it is important to understand the effects that debt elimination will have as a result of your personal situation, so that you can choose the most efficient and cost-effective way to combat your debt. While debt consolidation can help to reduce the extra fees associated with your balance, you are still subject to late charges and interest. If you're going to be paying installments against your consolidated debt for years, those extra fees can amount to quite a bit. Debt elimination removes excessive interest charges by squaring your account quickly.

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