0 Finance Credit Cards Vs. Debt Settlements

By: Anne Durrell

To some, there are ways of reducing debt far better than 0 Finance Credit Cards. Unfortunately, these individuals are very mistaken if they think some of these deals really are of any value. What deals would these be? In a word, they are financial settlement offers that are a very unwise thing to get involved with.

Anyone who listens to the radio has surely heard about debt settlement offers. These offers make the process of getting out of debt sound like a very easy proposition. According to the announcers on the commercials, it is possible to reduce debt down by 50% through the offering of a lump sum debt settlement. This is a partially accurate statement. What people are not stating on these commercials is the fact that debt settlement offers will ruin your credit rating.

Really, you did not think that paying back only half of what you borrowed would go unnoticed on your credit rating, did you? It looks like those 0 Finance Credit Cards are sounding like a much better option. Actually, the number of benefits 0 Finance Credit Cards offers over debt settlement are even more varied than that.

In addition to damaging a credit rating, you would have to pay income tax on the money that has been eliminated! So, if you settle a $5,000 debt for $2,500, you would need to pay state and federal income tax on the $2,500 you saved! Of course, there are no tax issues with 0 Finance Credit Cards which is another huge plus to them over debt settlement.

Also, when you are paying high interest rates on a $5,000 debt, you would be paying, say, $1,200 a year in interest. This would be 1/2 of the $2,500 settlement offer. When you apply for 0 Finance Credit Cards, the $1,200 you pay will go to the principle and not the interest. So, if you merely paid a minimum payment of $1,200 a year ($100 a month) the $5,000 debt would be reduced to $3,800.

Then, there is also the matter of having to pay the fees charged by the debt settlement company. They will be negotiating on your behalf and they will want to be compensated for their services. Of course, with 0 Finance Credit Cards, the fees for the debt settlement could have been put towards the cards' balances. As you can see, there really is not a lot of money to be saved when dealing with debt settlement offers.

So, why would anyone wish to seek a debt settlement if they had options of 0% refinancing? The most common reason that people would procure settlement offers over 0 Finance Credit Cards is simply due to the fact they are unaware of the significantly better benefits of using 0% interest cards. However, when one looks at a side by side comparison of debt settlement offers vs. using credit cards with 0% financing, it is obvious the latter is a much better deal.

0 Finance Credit Cards

0 financing credit card

0 Finance Credit Cards Vs. Debt Settlements

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