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If your credit score isn’t somewhere above 700, you probably won’t qualify.

Also, there normally is a transfer fee involved (2–3% of the balance being transferred) and an expiration date (usually 12–18 months) on the 0% interest rate.

You, or a representative negotiating for you, make an offer to your creditor to settle the debt for less than what is owed.

For example, if you owed ,000, you might offer the creditor a lump-sum payment of ,000.

Credit cards are the source of most financial problems for consumers.

The average American family has 3.7 credit cards and owes ,762 in credit card debt.

Debt settlement and debt consolidation are two forms of financial help for people struggling with more debt than they can repay.

Zero percent balance transfers are extremely attractive offers by credit card companies, but usually are limited to consumers with excellent credit scores.

The one new loan should have a lower interest rate and monthly payment than the combined cost of the bills you consolidated.

The cons to debt consolidation are just as obvious: The debt is not forgiven or even reduced.

The pros and cons of debt settlement and debt consolidation vary, especially with regard to the amount of time it will take to eliminate debts and the impact it will have on your credit score. When used properly, either can help you get out of debt sooner and save money. The prospect of paying less than you owe — far less in some cases — makes debt settlement an enticing choice for eliminating debt.

It is also a risky one, a How does debt settlement work?

For people who feel helpless with their financial situation and don’t want to declare bankruptcy, debt settlement could be the short-term answer.