Debt settlement could be option when just cutting up cards will not do

12/17/2009

One way consumers can help themselves when trying to pay off debt is by setting goals that are attainable for the coming year.

Recently, personal savings website Smartypig.com recommended a number of easy-to-achieve savings goals for consumers who are trying to get things right in the future. One thing the site suggested is for consumers to stay away from using their credit cards.

However, closing accounts may hurt a person's credit score. In order to avoid this, the website recommended consumers cut up their cards in order to make it harder for them to use.

"By eliminating extra cards, you limit opportunities to spend money you don't have," a report issued by the site said.

Though cutting up credit cards may be a way to avoid increasing debt, some people are already in too deep to have such simple measure pan out. Some consumers may consider opting in for debt settlement for their outstanding loans, especially if they feel as though they'll never be able to pay them off.

Though debt settlement could affect a credit score, a recent report from FICO shows that it is far less damaging than declaring bankruptcy.

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