What Are The Causes Of Credit Card Debt?

Inflation

Credit card debt surged in the United States from April through June 2022 as people borrowed billions of dollars to keep up with inflation, according to the Federal Reserve Bank of New York.

Relying on credit cards to cover these higher prices is a common response to inflation. But this practice has the potential to put you in serious debt unless you are able to pay off your credit card balances in full each month.

 

Credit Card Debt Settlement Options

Determining which credit card debt relief option could be right for you will be a lot easier if you take the time to fully understand how each one works.

Credit card debt relief

Credit card debt settlement

Credit card debt consolidation loan

Credit card debt management

This practice groups several credit card debts into one payment, cuts your interest rate and creates a 3- to 5-year repayment plan. The first step is thoroughly going over your financial situation with a credit counselor. The counselor will then notify each creditor of your debt management plan and that they are making themself the payer on your account.

The counselor may seek concessions from each credit card creditor, which can include lowering interest rates and monthly payments, or “re-aging” an account to stop late fees. Each month, your payment will electronically go to the counseling agency, which then pays your creditors. Be prepared to live without credit cards for as long as you are in the program.

Bankruptcy

When you mention bankruptcy, it brings up all kinds of implications and stigmas. But for some people, this is their best or only option. After you file for bankruptcy, your debt is resolved under protection from a federal court. Chapter 7 bankruptcy erases most debts in three to six months without your needing to repay the debt or liquidate your assets. The downside is that it tarnishes your credit for up to 10 years, which is a great deterrent if you need additional credit in the future.

 

How Does National Debt Relief Work?

You could pay a fraction of what you owe and become debt free in as little as 24-48 months by working with National Debt Relief—the top debt relief company in the country. For over a decade, we have helped more than 500,000 people pay off over $1- Billion in unsecured debt.

Enrolling in one of the National Debt Relief programs is so easy, you can sign up right over the phone or by email. To start, you will receive a free, no-obligation consultation with one of the company’s debt coaches. Please note that we never charge an upfront fee, it is illegal and unethical! After discussing your situation and determining if debt relief is right for you, we will customize an affordable monthly payment based on your budget and your financial hardship. Rather than paying your creditors, you will deposit a monthly payment to a FDIC-insured Dedicated Savings Account in your name. As the funds build up over time, we begin negotiating on your behalf to reduce your bills down to a fraction of what you owe. Our debt coaches have established relationships with over 10,000 creditors and know what to say to reach the best deal possible.

We only pay the creditor once we call you, discuss the negotiated amount and have you release the funds. As your accounts are paid off, they will be reported on your credit score as a zero balance. This could benefit your credit score.

Not until your debt specialist reaches a settlement with your creditor will you pay the company 15% to 25% of the enrolled debt. This is built into your monthly payments.

If there isn’t enough money in your account to settle all your debts, we will offer you a debt consolidation program. When you accept the offer, your debt is combined, and you will have just one monthly payment to make – to National Debt Relief. Most of our debt consolidation clients complete their program in as little as 24 to 48 months – depending on the size of their debts.

If you have a minimum $10,000 in unsecured debt, you could qualify for National Debt Relief and get your finances back on track. But you won’t know until you call.

Why Should You Trust National Debt Relief?

At the core of our client relationships is one simple factor: trust. We know that trusting anyone with your finances takes a leap of faith, and we live up to your expectations by providing our undivided attention. That way, we can better identify your goals and concerns before customizing an affordable plan that can save you the most money.

National Debt Relief is the first debt settlement company to be accredited by the Better Business Bureau with an A+ rating, the American Association for Debt Resolution, the Internal Association of Professional Debt Arbitrators, and rated #1 on Consumer Affairs. We are proud to be the country’s only debt relief provider to enjoy recognition from these three important organizations.

Our Commitment To Customer Care Leads The Industry

 

Commonly Asked Questions (Credit Card Debt)

How much can you save with credit card debt settlement?

Credit card debt settlement entails submitting a lump-sum payment for the majority of what you owe. In return, the company that owns the debt forgives part of the outstanding balance as well as certain fees and finance charges.

This is a good option if you are challenged with a high amount of debt. It can save you money by potentially reducing the principal balance owed on your accounts so that you can pay them off for less.

How do you pay off credit card debt?

How much is the average person in credit card debt?

Is credit card debt ever forgiven?

Debt forgiveness does exist, and it is possible to settle your balance for less than what you owe. But to have it totally erased is rare, unless you have a compelling reason like fraud or identity theft.

What happens if you ignore credit card debt?

When you stop making credit card payments, you could be charged late fees and higher penalty interest rates. Not paying will also hurt your credit score. If a balance in your account remains unpaid for a long time and goes to collections, you could be served with a debt collection lawsuit.

If you ignore the lawsuit, a court will likely enter a default judgment that allows the debt collector to garnish your wages. To avoid this aggravation, it is important that you respond to the debt collector and/or debt collection lawsuit immediately.

Does credit card debt expire?

The statute of limitations limits how long debt collectors can legally sue you to collect unpaid debt and varies by state and the type of debt. Below is a list of each state’s statute of limitations:

How does credit card debt relief compare to making minimum payments?

Credit card debt relief can reduce your debt to a fraction of what you owe and help you pay it off in as little as 24-48 months. On the other hand, making minimum payments on your credit cards could continue for 24 years and cost thousands more due to the high monthly interest. You will save time and money with an affordable debt relief plan.

Is bankruptcy a valid option?

What will your service cost me?

We never charge a fee until you approve the settlement agreement, and your credit card debts are paid off. There are no sign up fees, no cancellation fees, and there is absolutely no obligation – you are in control. Once a debt is settled, you will pay a fee that is up 25% of the total amount. If we can’t settle your accounts, you don’t pay a penny. In the end, the total you pay for the reduced debt and the fee is usually lower than the original debt amount.