Credit Card Debt

What Is a Credit Card Debt Relief Program?

Pin to Pinterest Share on LinkedIn

In a credit card relief program, you hire a company that negotiates your credit card providers and other financial institutions to reduce the debt you owe. If the company you hire is successful in their negotiations, you could pay less on your debt, reduce the total amount you owe, and get out of debt in 48 months or less.

A credit card relief program might sound too good to be true—but you should know that it’s not a silver bullet for everyone’s credit card debt. There are pros and cons to credit card relief programs, just like any other debt solution. So before you decide if this option is right for you, make sure you review these frequently asked questions about credit card relief programs.

How Do Credit Card Relief Programs Work?

Credit card relief programs help you get out of debt for less than you owe through a method called debt settlement. Here’s how it works:

  1. You sign up for a credit card relief program through a company that specializes in debt settlement.
  2. You stop paying your creditors and instead deposit money into an account that the company sets up for you. This money will be used later on to settle your debts.
  3. The company negotiates with your creditors one by one in an effort to get them to accept less than you owe on your debt.
  4. Once your credit card relief company reaches an agreement with your creditor, they ask you to sign off on the deal.
  5. After signing off, the credit card relief company uses money you’ve been saving in your account to pay your creditor and collect their fee.
  6. Once all your creditors are paid, you will no longer owe any money on that debt.

Most credit card relief programs take 24-48 months to complete, depending on how much you owe and how much you can pay into your program account each month. And since many of these programs can be customized to fit your budget, you could get out of debt for a price you can afford.

Do Other Kinds of Debt Qualify for Credit Card Relief?

Yes. Credit card relief programs could also help you get out of other kinds of debt. Debts that qualify for credit card debt relief include:

  • Credit card debt
  • Department store card debt
  • Personal loan debt
  • Medical debt
  • Some private student loan debt
  • Some business deb

Other debts that are tied to collateral do not qualify for credit card relief, including:

  • Mortgages
  • Car loans
  • Other vehicle loans
  • Federal student loan debt

The easiest way to see if your debt qualifies is by requesting a free debt evaluation from a credit card relief company.

What Are the Pros and Cons of a Credit Card Debt Relief Program?

Just like any other debt solution, a credit card relief program isn’t right for everyone. It all depends on your particular situation and goals.

Credit Card Relief Program Pros Credit Card Relief Program Cons
Can reduce your total debt Negatively impacts your credit
Debt can be resolved in 24-48 months Debt collectors may contact you
Affordable monthly payments Possible legal action
Professional negotiators on your side Results vary

Credit card relief programs could save you money on your debt and help you become debt-free faster than making minimum payments. Plus, when you choose a professional credit card relief company, you have expert negotiators on your side working to get you a great deal.

However, there are certain downsides to credit card relief programs. In order for your credit card relief company to negotiate with your creditors and reduce your debt, you need to stop using the cards you enter into the program and stop making payments on them. Stopping payment to your creditors gives the credit card relief company the leverage they need to negotiate a deal for you.

When you stop paying your creditors, they will report your missed payments to the credit bureaus, which negatively impacts your credit score. They may also use debt collection tactics to try to get you to pay back the full amount you owe. These tactics could include debt collectors calls and, in some cases, legal action.  

Is a Credit Card Relief Program Legal?

Yes—credit card relief programs are a legal way to settle your debt for less. In fact, many (if not most) creditors work with credit card relief companies on a regular basis to recoup some of the money they’re owed from people who can’t pay back what they owe in full.

But you should know that if you sign up for a credit card relief program, your creditors have the right to call you or take legal action in an attempt to collect the total amount you owe them. That’s why it’s important to work with a reputable credit card relief company like Freedom Debt Relief. We help our clients deal with creditor calls and even offer a legal subscription service that could help you defend yourself against legal actions.

How Does a Credit Card Relief Program Affect Your Credit?

After signing up for a credit card relief program, you stop paying your creditors. Doing this gives the credit card relief company the leverage they need to start negotiating your debt and reduce what you owe. Plus, stopping payments allows you start putting money into an account that the credit card relief company sets up for you so that you can settle the debt when your credit card relief company reaches an agreement with your creditors.

But when a creditor sees that you aren’t paying them, they may report your missing payments to the credit bureaus, which negatively affects your credit score. Taking a negative hit to your credit might make you feel a little uneasy. After all, you worked hard for your credit score. But for many clients of credit card relief programs, the benefit of getting out of debt for less outweighs the risk of a lower credit score.  

What Are Alternatives to Credit Card Relief Programs?

Find out here.

What Is the Best Credit Card Relief Program?

There are many credit card relief programs out there, so it can be hard to tell which one to choose. To make sure you’re signing up for the best credit card relief program for your particular situation, it’s important that you compare different companies.

A good place to start is with Freedom Debt Relief, because no other company has negotiated as much credit card debt. Also, we have a lot to offer, like:

  • Experience: Since 2002, Freedom Debt Relief has settled over $10 billion in debt and served over 650,000 clients. That’s more than any other company in the U.S.!
  • Customization: We know your situation is unique. That’s why we create an affordable credit card relief program designed to fit your budget and get you out of debt for less.
  • Expertise: Our team of expert debt negotiators has over 15 years of experience getting great deals for our clients.
  • Support: Our customer service team is available every day of the week to answer our clients’ questions. Clients also get access to our Client Dashboard, where they can track their progress and get updates on their program.
  • Trustworthiness: Freedom Debt Relief is a top-rated credit card relief company with thousands of positive reviews on websites like TrustPilot, BestCompany, and more.

To learn more about credit card relief programs and find out if Freedom Debt Relief is right for you, request a free debt consultation from one of our Certified Debt Consultants. During this brief call, we’ll walk you through your credit card relief options, tell you how much you could save with our program, and help answer any questions you have about credit card relief.

John Russo is a Creative Manager at Freedom Financial Network. His goal is to make the world of personal finance more accessible so that everyday people can find the right financial solutions for themselves. In his free time, he enjoys hiking, reading pretty much anything, and spending time with his fiancée and two cats.