Due to financial stress and the rising cost of all the basic expenses like gasoline, food, utilities, medical care, and college tuition fees, many people turn to credit cards, resulting to heavy accumulation of debts over the years. In the middle of this worsening crisis, creditors have also tightened their policies allowing only the most qualified borrowers to be approved of a new mortgage or loan. However even with this strict standard, more borrowers are still approved by creditors. These borrowers reach high levels of debts to sustain their basic needs.

It is tempting to use a credit card because when you pay cash you feel the pain in your pocket while paying through the card has no emotional effect of losing something, but in the long run, paying interest and helplessly exposing yourself against the unstable economy is worse than that pain you were trying to avoid. In other words, credit card may seem a fast solution to economic problems of everyone. Unfortunately, you end up having to pay higher borrowing costs than other forms of debt due to high fees. And it is also very difficult to get out of debt easily. When economy breaks down, creditors increase interest rates resulting to unaffordable minimum payments and the debtor is vulnerable to it.

Getting into debts is more likely in the current financial crisis, but finding a solution on how to get out of it is not easy. Nobody can get out of debts by ignoring or simply not paying the debt, as this is an illegal act. Illegal schemes will not work out as these loans are legal obligations. It is the consideration of banks and financial institutions to give the debtor an extended time to settle their debts or loans through the debt solutions.

Debt settlement, debt negotiation or Credit Debt Settlement is an effective debt solution in which the debtor and the creditor come to a common agreement to reduce the debtor's debt. Debt settlement is one of the best alternatives in handling credit card debts today. It is a legal way for a debtor to settle his financial obligations. Once the creditor have assessed that they may not be able to collect anything from the debtor who have no choice but file for bankruptcy, these creditors will probably compromise for a settlement. Both the creditor and the debtor will benefit from this arrangement.

Before you can begin to invest and build wealth, you must first resolve your financial debts. It is impossible to make financial progress if you are hopelessly trying to avoid interest charges and late payments. Penalties for late payments will cause your debt to blow out of proportion, making it impossible for you to move on. The benefits of a credit debt settlement are the debtor can avoid the bankruptcy court and the card company can recover their money. Both can reconstruct their finances and it's a win-win situation.