Consumer Credit Counseling - How to Lower Interest Rates and Eliminate Credit Debt

Show me a person with a credit card and I will show you a person who is sitting on time bomb. All it takes is one wrong swipe, one impulsive purchase, one rash decision or one financial emergency for your credit card debt to rise to unmanageable levels. What really hurts is the interest policy followed by the credit card issuer.

This form of debt is the most expensive form of loan available in the market. Further, the penalty and interest charges imposed on your credit card, rise and nearly double once you default on the same. A person who defaults has a very little chance of repayment of debt.

Once interest rate increases; chances of repayment come down to zero. In such a scenario, elimination of card debt becomes very difficult. If you want to overcome your debt problems, you will have to first focus on the interest rate and you will have to find out ways and means to bring your card debt down to manageable levels. Both these options have to coexist.

If you have a high interest card debt, it is obvious that you cannot manage all your loans. On the other hand, if you do not eliminate credit card debt, you will find it very difficult to keep the debt under control even if the interest rate is low. Is there any solution that will help you achieve both the goals in a single stroke? Well, card debt consolidation will help you lower the interest rate.

However, the discount offered ranges from 1%-5% for the lump sum repayment that is made. In such a scenario, it is obvious that credit card debt consolidation is not going to work. Other solutions that eliminate credit debt will not have any relation or bearing on the interest rate charged on your loan.

In such a scenario, settlement happens to be the best option around. When you get a 50% discount, your monthly outflow automatically comes down. Secondly, you can negotiate and lower the interest rate by increasing the tenure of the loan. Credit card issuers normally give 18-24 months to an individual who has finalized the settlement deal.

You can exceed this figure and increase it to 36 months but request a reduction in the interest rate. The increase in the tenure will make it more profitable for the credit card issuer. Once your finances are back on track, you can always make use of a consolidation loan or any bonus income to repay the debt in full to save on interest charges as well.