Best Method of Settling Credit Card Debt

When it comes to credit card debt, there are several ways to go about solving the problem. Among these are debt management and debt consolidation, both of which have their individual merits and problems. However, choosing which form of debt resolution will work for you will take time and careful consideration on your part. Don't jump into anything without first considering all of the consequences of your choice.

How can debt management help you
Of the ways to resolve credit card debt, a thorough management scheme is easily the most sensible, provided that you get started early enough in the process. Effective debt management revolves around paying on your debt early and often in order to control it and eventually begin paying it down. Creation of a budget is an essential part of debt management, and it requires a steady hand and close attention to detail in order to be done.

Debt Consolidation
Debt consolidation, on the other hand, simply requires a phone call to a consolidation company, a bank or your credit card company. One form of consolidation (an example of an unsecured loans debt consolidation) involves transferring the balance of your debt from card to card, which will theoretically lower both your interest rates as well as your minimum monthly payments. Another form is a debt consolidation remortgage using your house in a secured debt consolidation loan. Either way debt consolidation is often the choice of those whose debt has exceeded their ability to effectively pay it down and can, thus, be construed as a sort of last ditch effort at debt resolution.

Advantages and Disadvantages
The two forms of debt resolution each have much to offer the interested party, and both have their downsides as well. Debt management is all about paying in more than is coming out and, in that sense, requires you to be financially stable enough to make regular payments. Thus, proper debt management is often out of reach for those whose financial state is less than optimal. By the same token, debt consolidation is for those who have nowhere else to go, but it holds the possibility of simply making things worse through hidden fees, interest increases, and the potential to look like a credit risk if you do it too many times. Both consolidation and management have inherent risks that make them iffy in certain cases, but each has much to offer as well, if you're careful.

Need Help or Not
Essentially, what it comes down to is whether or not you need help paying down your credit card debt or not. If you don't, then debt management is your best option. It involves no outside parties or phone calls to your creditors, but instead completely relies on your ability to handle your own debts responsibly. If you are unable to do that, for whatever reason, then debt consolidation is likely to be your ticket out of credit card debt.

Whichever you wind up choosing, bear in mind that it is only a means to an end and not an end in and of itself. Clearing up your debt will still require you to shell out your hard earned money, just in different amounts. Regardless, you will be on your way out of the hole of debt you've dug yourself into.