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Credit Card Debt Settlement Tips

Settling your credit card debt is an effective and legal procedure for coming out of debts. Follow the tips mentioned below, if you are planning to settle the debt on your own.
With the ongoing economic instability and/or recession, it comes to no surprise that the number of unemployed people is rising day-by-day. In the present scenario, many people have to deal with the worst financial problems. Under such a situation, it may be difficult to pay off credit card outstanding bills for each month. Over a period of time, the sum of the default minimum dues total to a huge amount. The resulting outcome is that the user turns into a debtor. If you are also one of them, then the need arises to search for an alternative, to climb out of debts. So, in order to help you with the same, let's go through a few important credit card debt settlement tips described below.

There are several ways to come out of a credit card debt, out of which the most preferred way is through a debt settlement, debt counseling and a debt consolidation. Among these, the debt settlement is a wiser option, if you want to avoid bankruptcy and foreclosures. Let's take a look at the tips now, which you can follow while negotiating the debt amount.

Tips for Credit card Debt Settlement

If you have decided upon a credit card settlement, then you can opt for either of the two, settling it on your own and hiring a professional. In the first case, you will be dealing with credit card companies and debt collection agencies for settling the debt. No doubt, it is not an easy process, but the result is rewarding and you do not end up spending extra money in paying the service provider. On the contrary, if you hire a professional, then he/she will be responsible for handling the necessary paperwork and negotiations.

Though you are required to pay a fee for hiring a settlement agency, many people prefer to go through this route as such professionals are aware of the legal hassles involved. They possess information about various credit card companies and their rules, thus, making them the best people to hand over the task, to negotiate a debt to the lowest possible amount. These professionals are also responsible for answering the calls made by debt collection agencies.

Be Ready with Funds
You need to have money in order to pay off the settlement amount. In case you have none, then consider borrowing the amount with a low interest. Never make the mistake of trying to pay off the existing debt with another credit card as they charge a very high rate of interest.

Call The Company
Once you are ready with the funds for paying the settlement amount, you can call the credit card company. Keep your card, bills and statements in front of you while talking to the concerned person. Be polite and control your temper while talking to the manager who handles settlements. You can explain your current financial condition and reasons for opting this way out.

Debt Negotiation
When arriving at a debt negotiation start with a low percentage, about 25-30 percent of the debt amount. Usually, the negotiation amount falls within the range of 30-50 percent. Do not accept the settlement if the negotiated amount is more than 50 percent. It is quite possible that the company will contact you for a lower negotiation amount later. In case, you come to an agreement with the company, request for a written acknowledgment of the same.

Thus we have briefly dwelt upon credit card debt settlement tips and the ways of how to go about it. It is to be borne in mind that this process affects a person's credit standing to a great degree, as the lender or credit card company documents it on your account. It will remain in the credit report for seven years. Nevertheless, at any point of time, a settlement has a better impression than filing for bankruptcy or foreclosure.
By Ningthoujam Sandhyarani
Last Updated: 9/22/2011
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