Types of Credit Card Debt Relief - For Free

Reader Question: I have a lot of credit card debt I want to work on paying off. I plan to buy a home later this year, and I know that paying things off is a necessary first step in my case. Is there any place where I can get credit card debt relief for free?

I would recommend one of three options. You could either (A) take the do-it-yourself approach, (B) work with a non-profit credit counseling agency, or (C) use the initial / free debt counseling services of a company like Credit.com. Let's talk about each one of these options in turn.

Option 'A' for credit card debt relief is free because you would do it yourself. In this scenario, you would work out a payment plan to pay more than minimum balance do on your credit cards, with the ultimate goal of paying down the debt associated with each card. Make no mistake about it -- the whole "minimum payment" thing is designed to keep you paying the credit card company forever. When you factor in the interest, you can never pay off the balance by making the minimum payment alone.

To take the do-it-yourself approach to credit card debt relief, you would first need to create a budget for yourself. That way, you'll know how much money you have to work with each month, and how much you can afford to put toward your credit card balances. Make sure you have enough to cover your most important monthly expenses, such as housing, food and insurance. Then look at how much you have left over. You will use a portion of this remainder for your credit card debt relief plan.

Start small by paying about 1 1/2 times the minimum balance. For example, if your minimum payment due is $50, see how you can manage a $75 payment each month. If you can handle that, you might even try to double your payments each month. Aside from paying off the credit card balances in one lump sum (as you would with a debt consolidation loan), this is the fastest way to reduce your card balances -- by doubling up on your monthly payments.

Option 'B' offers another form of credit card debt relief that is either free or very affordable. With this option, you would work with a non-profit agency like the National Foundation for Credit Counseling. I have never worked with the NFCC, but I've heard many good things about them and nothing negative. So their website might be a good place to start. Because they are non-profit, their debt relief counseling is free in some cases and very affordable in others. Just be sure to ask about the cost before signing up for this or any other type of credit card debt relief program.

Option 'C' gives you yet another form of free advice on managing debt. Credit.com offers a service where you can sign up for a consultation with a debt counselor. The initial phone consultation is free, and after that you can decide if you want to continue with it or not. There is no obligation with the first call, so you have nothing to lose by looking into it.

Other Debt Relief Options

The three options listed above represent the purest form of credit card debt relief, which is finding a way to pay down the balances. But there are other options you should research as well. For example, a consolidation loan is one way to replace multiple credit card balances with a single loan balance, and often at a much lower interest rate. This could certainly simplify things, and it might even save you money in the long run by reducing the amount of interest you pay on the debt.

In closing, let me offer you a word of caution. Use debt settlement programs as a last resort. Any time you hear the word "settle" or "settlement" used in conjunction with debt relief, it means you are paying less than the full amount owed. When this happens, the creditor will charge off the rest of the debt, and it will show up on your credit report as such. Thus, it will also hurt your credit score.

I hope this article helps you understand your options for free credit card debt relief, as well as the many low-cost options worth considering. Try to work out a budget that allows you to pay down the debt you currently owe. If you can't handle it by yourself, consider a non-profit credit counseling agency, or a free initial consultation through a service like Credit.com. And try to avoid settlement if at all possible. It's better to pay your credit card debt in full, rather than settling.

Related Q&A sessions:

• Where can I find debt consolidation help?
• I want to pay off my credit card debt. Where do I start?
• How does debt settlement affect my credit score?

I hope this information has helped you. Good luck.