A credit card debt management program offers the most flexibility to consolidate debt!
There’s not one right way to consolidate credit card debt. In fact, there are several solutions you can use. But most of them require good credit and only work for limited amounts of debt. By contrast, a credit card debt management program (DMP) allows you to consolidate debt, regardless of your credit score. You can even consolidate high-volume amounts, even if you have more than $100,000 to repay.
How a credit card DMP works
- First, you talk to a certified consumer credit counselor for a free debt and credit evaluation to see where you stand.
- If a DMP is your best option to get out of debt, they help you enroll.
- You provide a list of the accounts you wish to include.
- Then the counselor helps you work out a payment that fits your budget.
- There is a setup and monthly maintenance fee for the program that will be included in your monthly payment; fees vary by state and your financial situation, but they’re capped at $79.
- Once your plan is set up, the credit counseling agency contacts each of your creditors to negotiate. Each creditor must:
- Accept the adjusted payment schedule
- Agree to reduce or eliminate interest charges applied to your debt
- Stop all future penalties on your account
- After all your creditors sign off, you begin making payments. You pay the agency one payment each month and they distribute the money to your creditors as agreed.
Credit card debt management program benefits
- You pay back everything you owe, so there’s no credit damage when this is done correctly.
- With reduced or eliminated interest charges, you can get out of debt faster, even though you may pay less each month.
- Most people complete the program within 36-60 payments, so you’ll be out of debt in less than five years.
- On average, this program can reduce your total monthly payments by up to 30-50%.
- Interest charges are typically reduced to 0-11%.
- You can consolidate high volumes of debt, even if you owe $100,000 or more.
Is a credit card debt management program the right solution for you?
A credit card DMP is generally the best solution to use if …
- You have bad credit and can’t qualify for do-it-yourself solutions
- You have too much debt to consolidate successfully on your own
- You’ve tried other DIY solutions and they haven’t worked
- Most of your debts are still with the original creditors; otherwise, consider debt settlement.
A DMP can also work for…
- Store credit cards and in-store credit lines
- Gas cards
- Unsecured personal loans, including credit card debt consolidation loans
- Payday loans
- Unpaid medical bills