Credit Card Debt Settlement Tips

Many of us are in need of credit card debt settlement tips. More and more consumers are finding themselves on the wrong side of debt, owing more than they can pay back. Studies have shown that this happens to most of us more than once over our lifetimes.

credit card debt settlement tips

Repair Your Credit Now

What happens next is we lose access to all important lines of credit and our FICO scores go down. Our credit histories are blemished. We’re not eligible for the best loans, new credit cards and other financial support. We may have jeopardized employment and living opportunities, as certain entities will run background checks on our creditworthiness.

Getting out of debt and repairing one’s credit is not impossible. It will take due diligence, patience and perseverance, but it can be accomplished. Here are three credit card debt settlement tips that can help you get on the road to recovery.

Educate Yourself

Credit card companies have their job. It’s to make money by offering financial services to consumers. They assess the risk of these applicants and act accordingly. Credit reports and scores are used to determine if any individual applicant, whether consumer or business, can be trusted with credit.

Once a consumer has begun missing payments for any reason, the delinquency is automatically reported to credit report bureaus. This is not good. Contact creditor(s) immediately and attempt to negotiate a settlement. The longer the bad mark sits on in your credit history, the more damage it does to your creditworthiness.

Inform your creditor(s) that making good on the debt is a priority, but your finances make it nearly impossible at this time. Tell them before filing for bankruptcy, you’d like to pay off what you can in exchange for freezing fees and interest.

The credit card companies will undoubtedly be resistant. Hearing the word bankruptcy will trigger a nerve though. In the money business, often settling for retrieving a portion of what’s owed is better than having it liquidated all together and never getting a penny.

These negotiations may not happen overnight. There might be hours or days, but keep at it. Convince them that the 25 percent of the debt you can afford is better than nothing and that the account can be closed once you have fulfilled the agreed upon settlement.

Know Your Rights

There are plenty of organizations, like the Federal Trade Commission, whose sole purpose is to protect consumers in these matters. They do not necessarily supply credit card debt settlement tips. They can, however, show consumers how to deal with creditors and credit issues.

Stop the phone calls. If you request in writing a creditor or collector not call your phone number, they have to stop.
Creditors know they are not supposed to call you multiple times of the day. By law, that’s harassment.
Creditors cannot use legal action to manipulate or intimidate you, unless they are actually planning to do so. They cannot send you documents that look like court papers. Many do as a form of threat.
If you are unsure the debt is yours, or if you believe the amount is inaccurate, the creditor or collection agency needs to provide proof in writing.

When creditors or collectors call, get as much information about them as possible, company and representative name, address and phone number. Avoid getting into heated conversations with the representative. They are only doing their job and have no authority or responsibility for your debt. Keep dates of the contact. If the need for a complaint comes down the pike, trying to get the information later could be troublesome.

Credit Repair Services

These bad credit repair companies should be the kings of credit card debt settlement tips. For a fee, they will supposedly help you repair credit reports, work with your collectors to clear debt and help with other financial support.

Most of these companies are scams. They prey on the uninformed, counting on a consumer’s lack of financial education and credit awareness. They utilize extremely aggressive marketing tactics knowing how badly we want to settle our debt and fix our creditworthiness.

On the other hand, even a legitimate bed credit repair company is charging a fee — sometimes a large or monthly fee — to perform actions that consumers can do on their own. They call collectors and negotiate settlement. They work with credit bureaus to remove blemishes from your reports, etc.

Summary

Resolving your financial dilemma is as simple as implementing a few credit card debt settlement tips. As stated, it won’t necessarily be an easy process, but it can be done.