How to Settle Your Debt and Lower Your Credit Cards

Has your credit card debt increased in the last year due to financial hardship or COVID-19-related reasons? Sometimes rising debt seems impossible to overcome without the help of a debt consolidation company or program. Ways to get out of debt quickly are available but are they all effective & trustworthy methods?

Filing for bankruptcy in the U.S. is still an option. The IRS offers tax debt relief programs now as well. Do you have a high revolving credit card you are unable to pay off no matter how you try? Numerous credible ways to settle a debt and lower credit card balances exist in 2021. Do you want to know how to settle your debt and lower your credit cards? Read tips, tricks pros, and cons about debt settlement options, and learn how to lower your credit card debt today.

Different Debt Settlement Options

The options to settle debt are out there. Many questions come to mind when considering these options. For example, how do you know what debt settlement option is best for you? What are the pros and cons of each method? Which options yield the best, most reliable results?


Bankruptcy is a common consideration for consumers with high credit card debt. Filing for bankruptcy is a major decision requiring research and planning to be executed effectively. Bankruptcy provides two options. Chapter 7 and Chapter 13 bankruptcies each have their own pros and cons.

Tax Debt Relief

Are you in debt with the Internal Revenue Service (IRS)? The IRS offers tax debt relief programs. If you have good credit but do not qualify for IRS debt relief it might be possible to pay off your tax debt using no-to-low interest balance transfer credit cards.

Debt Relief Services

Hiring a debt relief company is another debt settlement option. Debt relief companies help you negotiate lower balance payoffs, clear your credit history of erroneous reports and manage your finances while in process of paying off outstanding debt.

Debt Consolidation Programs & Loans

Debt consolidation is a popular debt settlement method. Various versions of debt consolidation programs are available depending on your FICO score, level of debt and verifiable income. Multiple lending institutions offer secured/unsecured personal loans for debt consolidation purposes. High credit card debt is also possible to consolidate onto better credit cards at no-to-low introductory APRs when transferring balances onto new accounts. Credit rating and income approval are required for balance transfers. Are you a homeowner with equity in your home? Second mortgage and Home Equity Line of Credit (HELOC) accounts might be options for you.

Pros and Cons of Different Debt Settlement Options

Pros and cons exist for every available debt consolidation method. Comparing the differences between pros and cons helps you make the best decision for your financial situation. For example, Pros of Chapter 7 and Chapter 13 bankruptcies include the dismissal of most of your debt and protection from discrimination by government agencies & your employers. Cons of bankruptcy include 7-10-years of filing visibility on your credit report, damage to your FICO score and the possibility of debtors denying certain debts from inclusion.

The pros of IRS tax debt relief programs outweigh the cons, but cons still exist. The pros include removal of fear from IRS-based consequences including garnished wages, expensive penalties and possible incarceration. The IRS might also offer a deal, effectively cutting the amount you owe down by considerable amounts. The cons of IRS tax debt relief programs include registering on the IRS’ radar and the need to be on time and accurate with all future tax filings to avoid further penalties. Qualification is also not guaranteed for all applicants.

When debt relief services are trustworthy and effective the pros of using such services are numerous. Deals are cut to reduce the amounts you owe certain creditors to end your debts. Monthly payment amounts might be reduced, providing you more financial flexibility all year long. Your consolidated APR might also be drastically lower. The cons of using a debt relief serve include not seeing hidden fees & charges prior to signing contracts and underestimating the amount of interest charged in the end. The biggest con for using a debt relief service involves scams. Some companies try to trick you into paying service fees up front but never do anything to help you. Others say they will help, take your money but only make things worse via bad deals. Research all debt relief companies carefully prior to signing any contracts.

Most debt consolidation loans through traditional lenders are straightforward, which is a huge pro itself. If your credit is good you are capable of getting one low consolidated APR on an installment loan to replace high multiple interest credit card rates. Cons include sacrificing collateral if you default and additional damages to your credit rating when installment loan defaults are reported along with defaulted revolving accounts.

Consolidating Your Credit Cards – Pros & Cons

The pros and cons of consolidating your credit cards with other credit cards are worthy of careful consideration. Many card issuers offer no/low interest introductory rates as a promotional strategy to gain your business. If you have good credit and can take advantage of these deals, it is possible to lower your credit card rates/balances by completing a money-saving balance transfer. Consolidating your credit cards into installment loans also has its pros. Installment loans tend to offer lower APRs. Cons of consolidating your credit cards include:

• Higher rates kick in after promotional periods end.

• Even one late payment negates most promotional rates.

• You still have the ability to charge to your credit cards and keep your debt high.

• Failure to adhere to all terms usually costs more money and does more damage in the end.