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Options for dealing with credit card debt

Even though the holidays are over, the credit card debt for many Tennessee consumers continues on for months or even years. It's the gift that keeps on giving. Instead of continuing to pay 20 percent interest or more on a card in which the balance never seems to go down, consumers try other options such as debt consolidation loans and switching to new credit cards with zero percent introductory financing. But are these good ways to reduce credit card debt without negatively affecting credit scores?

Many consumers choose to transfer their high balances to a credit card with a lower interest rate. There are many cards that offer a zero percent rate for a limited time -- such as a year or 18 months. This is a good way to pay off large amounts of debt, but it takes some discipline. These low rates don't last forever, so the balance should ideally be paid off before the offer expires. Otherwise, the interest rates could become sky-high and leave someone with more debt than before the transfer.

Another option is to consider a debt consolidation loan. It may seem like getting a loan to pay off debt would dig a person deeper into debt. On the contrary, if the rates are low enough, this can be a great pay off high amounts of debt quickly. The challenge is finding a good rate, which can be hard if a person's credit score is low. But it is possible and the result can be beneficial to a credit score.

There are several options for debt relief. Consumers should try to create a budget and try other self-help options first before resorting to more extreme measures.

Source: MSN Money, "Will debt consolidation help or hurt my credit?," Gerri Detweiler, Dec. 20, 2013

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