Credit Card Debt Settlement Process

Even though credit cards are useful for many applications like booking tickets, hotels, and purchasing goods, many card holders lend into debt every year. It is estimated that most credit card holders tend to spend about 12-18 percent extra money annually. In fact, millions of American citizens struggle to pay the minimum due each month. If minimum payment is not made on time, the creditor charges a late payment penalty. In such a situation, the card user turns into a debtor over a period of time.

If the credit card holder is unable to pay the minimum due, then he/she can request for lowering the annual percentage rate (APR). With such a process, the annual interest rate charged on credit cards is reduced to a certain percentage, as per the company norms. For example, if the current interest rate is 16 percent, it can be lowered to about 11 percent.

In case, the card holder still fails to pay off the arrears, then it is high time to contact the lender for debt settlement. Let's discuss in brief about the steps involved in this process. There are debt counseling and management services, which you can rely on for carrying out the credit card debt settlement process. They will review the current financial condition and perform the necessary steps for settlement.

Also, the service company handles the collection calls from the agencies in your favor. Nevertheless, they will charge a certain fee for handling the procedure. Another cost-effective alternative is to settle arrears on your own. Contacting the Credit Card Company: Once you have decided for settlement, contact the concerned company without further delay. The quicker you talk with the creditor, the higher are the chances for settlement.

You can explain the genuine reason for proceeding the debt settlement process to the card issuer. While talking with the concerned person, make sure that you respond politely. Negotiating Debt: While negotiating debt, start with a greater percentage like 70 percent. Depending upon your present financial status, the creditor will fix the negotiation amount.

The average settlements fall within the range of 30-50 percent. However, the amount can be as low as 20 percent or as high as 80 percent. Don't negotiate for a very low percentage. Dealing with Debt Collectors: Dealing with debt collection agencies can be considered as a worst nightmare. They use every trick in the book for collecting credit card payments that you owe to the creditor. You can send a written application to the creditor to stop being contacting by the debt collectors.

Duration: This process may take about a few months to a few years, based on the debt amount and the creditor rules. Some companies ask to pay a lump sum negotiation amount, whereas some give the flexibility to pay in parts for a period of time. You can also request a convenient payment option as per your financial condition. At any point of time, debt settlement is a legal and effective method to manage arrears.

With such an option, there is no need for bankruptcy filing that affects the credit rating for many years. Also, you will be relieved from foreclosure even if the situation is very serious. Another alternative to this settlement is debt consolidation, in which the balance of a card is transferred to another card with a low interest rate.

Dont make them so accessible! Call your creditors. It doesnt hurt to give them a call. Find out what their intentions are and if they plan to increase the payments. Get the details. Believe it or not, they can help. Adjust your withholdings. Sure, many of us like to use that as an “out of sight, out of mind” type of savings account. But if you are in need, it can be a good resource for some additional monthly income.

Learn how credit works, and how each option to get out of debt will affect you; your credit, payments, total cost, time frame and savings, plus the additional positives and negatives that come with each options. Make your BEST CHOICE and DO IT; Get out of debt! Minimum payment increases may be more than inconvenient to many Americans, to say the least, but in the end, it will be beneficial to the economy and consumers. Get a head start, if you still can, or get help if you're struggling. Get your financial situation in order today and escape the credit card trap. Cheers to living a happy and debt-free life!

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An average US resident has 4-5 credit cards. Using credit cards is not only convenient but they also give us lot of financial flexibility. When we use credit cards, we tend to forget that we have to pay for it in the end. In addition to that, we also have to pay an interest on the balance. Credit card is easy money and that is why so many people tend to overspend get themselves in debt.

Credit card debt management in the US is to help consumers get out of credit card debt. Credit card debt is a trap that is hard to get out of. A little emergency in your family can put you behind on your credit card payments. If this happens your credit cards' debt is going to go up due to late charges and finance charges.