Credit Card FAQ

How Do I Settle Credit Card Debt?

7 February 2013 by CreditCardsCo™

Settling a credit card debt means that a creditor or collection agency agrees to pay some part of the amount of your debt. The credit card holder needs to negotiate with the collection agency to get an offer. For example, if you have debt of $1000 dollars, your creditor may accept on $500 dollars in full payment and remove the rest of the debt.

Negotiating a settlement with creditors can be nerve racking as it demands patience, but the effort can save thousands of dollars which you can't afford to repay. As the first offer is almost always refused, it is advisable to take your time before you agree to an offer. The creditors will always return with an offer as they need to recover the money.

What Is The First Thing To Do?

If you are having trouble paying your monthly payments and your credit card has too much debt, you should consider calling your credit card company. If you are 90 days behind the due date, the credit card company may offer to settle or pay a portion of the debt. Make sure you call them and discuss your options.

What Things To Keep In Mind While Settling Credit Card Debt?

These are some of the things to keep in mind while you are settling a credit card debt. Don't make your monthly payments if you want to settle your credit card debt. Companies do not settle with someone who makes regular payments. Credit card companies make a settlement only when they are sure that the credit card holder does not have the money to repay them back.

Ignore the threats from the collection agencies. They may threaten to sue and take over your possessions but hardly go to the extent as they do not have the time and expense to do it. Keep telling them you are thinking about bankruptcy and if they decide not to go ahead with settlement, tell them they will lose their money as you don't have any money to pay them back.

The offer should always be realistic and one which you can afford. Your first offer shouldn't be more than a quarter of the debt. Keep talking to them until you get a mutually acceptable agreement. Make sure that the person you are talking to has the authority to offer a settlement offer. The deal should be formally written and a copy of it should be kept with both parties.

How About A Third Party Debt Settlement Company?

Third party companies charge a lot of money and it is better to deal with credit card companies on your own for free. If you have trouble negotiating a suitable deal then contact non-profit credit agencies which have counselors who can finalize a deal for you.

Is It Easy To Get Them To Settle The Credit Card Debt?

No, it's not easy to come out of debt or reach a settlement as there are plenty of credit card holders trying to get out of paying what they owe. The card holder should have a reason to reduce the debt like temporary loss of job, separation from partner, or medical problems. There should be a genuine reason when you are asking for a settlement. If a person is making enough money then they need to pay back their debt.

This article answers important question on settling credit card debt and the first and the next steps for settling credit card debt. Its purpose is to provide a guide and approach for credit card settlement and provide a realistic approach towards settling your debts. The conclusion of the article is that credit card settlement requires patience but with a sensible approach, a mutually acceptable agreement can be reached.

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