Debt consolidation vs. debt settlement: Which option is right for you?

Both options offer unique benefits for borrowers right now. Here's what to know to help you decide.

Inflation continues to hit the economy and Americans' wallets. Some have turned to credit to help make ends meet. The Federal Reserve Bank of New York reports household debt climbed $212 billion in the fourth quarter of 2023 and now stands at $17.5 trillion. Credit card debt, in particular, soared $50 billion to a record $1.13 trillion in debt.Consumers with credit card debt have been hit hard by the Federal Reserve's aggressive interest rate hikes meant to curb inflation.

However, it can lead to more debt if you don't have a solid plan to avoid racking up debt on cards you pay off through consolidation.Learn more about debt consolidation here now.What is debt settlement?Debt settlement is another option to tackle insurmountable debt, but understand the risks involved before proceeding. This strategy involves negotiating with your creditors to pay less than what you owe on your accounts.

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