With total credit card debt in the U.S. approaching $1 trillion, many people are looking for a way to reduce their debt. The only sure way to reduce your credit card debt is to pay extra on your accounts. Even so, other programs may help you reduce balances or interest rates.
Government Programs
The publicity surrounding the federal government's Making Home Affordable program has had many consumers looking for a similar program to help them reduce credit card debt. Although rumors are plentiful concerning the existence of such programs, they are simply not true. The government does not have a program to reduce credit card balances and payments. A reason for this may be that widespread credit card defaults do not cause the same economic problems that home foreclosures do.
In-House Programs
Many credit card companies have their own in-house programs to reduce credit card interest rates and payments. Credit card companies have an interest in collecting all of the money that they are owed, and in keeping their current customers, so they may step in to help out with lower interest rates and other fees. To get these concessions, you usually have to call your credit card's customer service number. If the first person you contact is unable to help you, ask for a supervisor.
Debt Counseling
If you are unsuccessful in negotiating concessions from your credit card companies on your own and you are facing financial problems, you may want to consult a credit counselor. Often, a counselor will have special contacts that they work with to negotiate reductions to your interest rates using any special programs. Credit counselors can also help you work out your home budget, and develop a plan to get yourself out of debt permanently.
Consolidation
Debt consolidation consists of refinancing your high interest credit cards and other high interest debt into a new low-interest debt consolidation loan or a home equity loan. This type of consolidation can save considerable amounts on your finance charges by significantly lowering your interest rate. Be cautious when refinancing into a home equity loan, as you are transferring unsecured debt to loans that are secured by your home. If you are unable to pay the loan, you could lose your home to foreclosure.
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