Credit Card Debt Free

Refinance Credit Card Debt Or Settling?

Before answering your question I'll first show to you how to simply identify your type of debt and how both of these options may or may not work for you.

There are two large branches of debts and from each one of them many different categories can be found. They are the unsecured or secured debts. Secured debts use real properties so they will have a promise you will pay your debt until it finishes. Unsecured debts have nothing to serve as a promise of repayment but your word.

Unsecured debts can never be good candidates for settlement for the lack of anything backing them up and unfortunately, the credit card debt falls right into that category. But, if you got a credit card with a good credit score to begin with and that's why you're in debt, creditors will be considerate of you and will probably be interested in negotiating.

So by knowing how was your credit score before and how much you owe is the first two steps to get your life back.

Refinancing can work specially well for two reasons: it will reduce the interest rate by refinancing your entire debt into a lower amount, and by extending the time you have to pay it all out. Essentially, refinancing will decrease your monthly payment's amount so you'll be able to pay all your debt having some extra money left by the end of the month, if you organize yourself properly.

The good thing about this option is that differently from the debt settlement, you don't need much to prove you can do it. All you have to do is only to show you're willing to pay it all off. What you could be risking by choosing this form of solution is that you may have to pay extra fees for your transactions associated with refinancing.

Either way, you'll have positive and negative aspects to both options. What you'll have to really figure out is what service wants to work with you depending on your records and work from there.