Consolidating credit card debt pros and cons

You, or a representative negotiating for you, make an offer to your creditor to settle the debt for less than what is owed.

For example, if you owed ,000, you might offer the creditor a lump-sum payment of ,000.

The pros and cons of debt settlement and debt consolidation vary, especially with regard to the amount of time it will take to eliminate debts and the impact it will have on your credit score. When used properly, either can help you get out of debt sooner and save money. The prospect of paying less than you owe — far less in some cases — makes debt settlement an enticing choice for eliminating debt.

It is also a risky one, a How does debt settlement work?

Zero percent balance transfers are extremely attractive offers by credit card companies, but usually are limited to consumers with excellent credit scores.Throw in bills for rent, cable, cell phone, utilities and on and on, and that’s a lot of accounting to keep up with every month.If you fall behind on one credit card, it can be an uphill struggle to catch up.Debt settlement and debt consolidation are two forms of financial help for people struggling with more debt than they can repay.The two terms are often used interchangeably, which leads to a great deal of confusion on the part of consumers, who may not realize that these are vastly different debt relief services.

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