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By: Penny Monroe
This year, the volume of American plastic card holders was determined to be about 181 million, up by almost 20 million within just a few years. The average cardholder owned 3.5 cards. The common unsecured debt per household was a lot more than $15,000, bringing about a nationwide credit card debt of almost one billion dollars towards the end of that year.

These are staggering numbers, and they are only anticipated to increase with the future years to come. As unfathomable as the challenge with debt could be, it remains a reality that every bank card holders must face. Countless Americans are being affected by unpaid credit bills, plus some may even be buried so deep in financial trouble that they need to declare themselves bankrupt. In case you have your personal difficulties with debts, but don't desire to take such drastic steps yet, then you may need to look into debt settlement programs to effectively take care of your money.

Credit card debt settlement, also is known as debt arbitration, debt negotiation or credit settlement, is the act of negotiation from your debtor and a creditor where both parties concur with decreased balance that is to be considered as full payment for the debt. This kind of debt relief might appear to be beneficial only to the debtor, but remember a creditor will be more happy to accept a smaller payment than not be paid at all.

Having less debt is one of the main advantages of debt negotiation. In reality, debt settlement programs might help reduce debts by as much as 50 per cent, so that it is easier for debtors to make a payment. Together with overall credit card debt reduction, you may also negotiate with your creditor to cut back or eliminate interest rates put on the existing debt, which further lowers the monthly obligations that you have to make.

Besides decrease in the amount which you owe, debt settlement programs allow you to talk to your creditor a payment scheme that will work most effectively for each party. You may give options to pay smaller fees over a extended period of time if this sounds like what you can best afford.

However, such benefits are not proposed without certain setbacks. For instance, while enlisting for a debt settlement programs may decrease your debt to a manageable amount, this may drastically hurt your credit ratings. Defaulting on credit agreements will likely be reported to credit reference agencies. You will get a lower credit history and will also help it become more difficult for you to get loans later on. Moreover, debts eliminated in the settlement program will probably be treated as taxable income. As such, instead of owing your creditor, you'll owe the Internal Revenue Service (IRS) a substantial amount.

Debt settlement programs give a quick strategy to take care of your finances. It is possible to pay your debts completely in two to three years with this particular form of assistance, but remember the potential risks that are included with this program. If you are careful and disciplined, however, you'll find yourself totally free from the load of debt eventually.


Some of us have some issues with credit cards and other debts that we neglect to resolve just yet. Others resort to debt settlement programs to help and assist with their financial problems.
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