Credit Card Debt Settlement Tips

Being knee deep in credit card debt with no real way to pay it off is one of the worst situations you can be in financially. If you take your situation seriously and consider all of your options you will be able to find your way out of this situation with time, but it will not be an easy road. Debt settlement is one option you could pursue if you just cannot seem to get ahead of your credit card bills. With the way interest compounds on your credit card balances it will take you decades to pay off a large balance if you just make minimum monthly payments, but you should know this already. Here are a few tips if you decide to pursue debt settlement:

The first “tip” I have for you is not much of a tip at all. You need to know exactly what credit card debt settlement is before you go through with one. Debt settlements are where you and your creditors, in this case credit card companies decide on a mutual agreement to settle your debt once and for all. If you owe credit card companies 6,000 dollars you may be able to settle for 3-5 thousand dollars depending on your particular situation. You do not want to pursue a debt settlement without knowing the ins and outs of the process, but you have to know the basics first!

Another tip I have for you is to decide early on whether you want to go through the debt settlement process by yourself, or if you would rather work with a debt settlement company. Going at it by yourself is nice because you save money and you have control of the situation, but working with a company is advantageous because you will be working with financial professionals that should be looking out for your best interest. Only consider going for a debt settlement by yourself if you are okay with stress, paperwork, and working with financial documents. The average person in credit card debt should decide to work with an accredited debt settlement company, if you get yourself into this mess, what makes you think you can get yourself out?

Another tip that is important to keep in mind when considering credit card debt settlement is to not cut any corners, especially when it comes to researching potential debt settlement companies to work with. Unfortunately most of the debt settlement companies you see advertised on TV and other forms of media are scams, they simply want to make money off of you and they could not care less about your personal situation. There are legitimate debt settlement companies, you just have to look hard to find them. “Google” debt settlement companies, look them up on the BBB, ask friends and family if they have ever dealt with the companies or heard anything about them… Do whatever it takes to improve your situation!

It is important for you to know how to negotiate when talking to your creditors, especially if you decide to go through with a debt settlement by yourself. You should start out around 50% of what you really owe, which means you should offer to pay around $5,000 to your creditors if you owe $10,000. You may end up having to pay slightly more, but you do not want to start out too low because you will not be taken seriously. If you start out at a number that is too high you will obviously be costing yourself thousands of dollars.

The last tip I have for you is that this is not a “magic bullet” debt settlement can save you thousands of dollars and can completely reform your financial life for the better, but you still have to put in hours upon hours of work along with thousands of your own dollars to get the debt settlement done. Any company that makes you believe that debt settlement will be an easy process is not a company that you want to work with because they are not telling you the truth. If you have run out of other options credit card debt settlement is something you should consider, but it is not a fun process.