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credit card debt

How to Settle Credit Card Debt

By: kjmena


Credit card debt is one of the most common forms of debt in the U.S. For this reason, millions of Americans suffer with trying to pay off their debts each day. However, what most don’t know is that there are some debt relief solutions that can help reduce your debt and get on track to debt freedom.

The average American household has a credit card debt of $7,697.00. That’s only in credit cards, not including a mortgage, car loan, or student loans. This amount can increase especially when you take into account interests rates and late fees.

Luckily, there is a debt relief solution that can help to reduce unsecured credit card debt to an amount that is affordable and favorable to the debtor. This debt relief solution to credit card debt is known as debt settlement.

What is Debt Settlement?

Debt settlement is a form of debt relief in which you use a third party company to settle your debts on your behalf. In a debt settlement program, you will make monthly payments into an escrow account that the debt settlement company will use later to settle your debts with your creditors.

In addition, debt settlement works best for those who are struggling to make their monthly payments and know that falling behind on their payments could significantly impact their credit score.

Do I qualify?

Debt settlement is best for those with over $7,500 in unsecured debt. This is because that is the minimum amount that a debt settlement company will need to negotiate with creditors. Any amount lower, has a higher chance of not being settled and will still need to be paid in full by the debtor.

Furthermore, this program is best suited for those who can make monthly payments. A debt settlement program relies on monthly payments into an escrow account and only those who can make those payments will be able to join the program. If you have no funds at all, it won’t be possible to settle your debts at that point because creditors want some amount as repayment.

Why is it the best form of debt relief?

Debt settlement is the best form of debt relief because it caters to your debt relief goals. Not to mention, at the end of the program all of your enrolled debt will be eliminated and you will be debt free.

Also debt settlement is all about reducing debt to an affordable amount. With other debt relief options, the third party will try to get you to pay the full amount and will only be able to help you once you pay an upfront fee.

Debt settlement companies are looking out for the debtor and have their best interests when it comes to settling their debts. They are going to fight to get you the best settlement so that you can save the most money and get out of debt in the fastest amount of time possible.

What to look for in a Credit Card Debt Settlement Company

Accreditation

This is the first sign that you are dealing with a legitimate debt settlement company. The first seal you should be looking for and asking about is their Better Business Bureau grade, or their BBB rating. This will let you know the standard of company that you are dealing with and how good they are within their industry.

Next, you should be looking for some debt settlement industry specific accreditations, like the American Fair Credit Council and the International Association of Debt Arbitrators. Both of these accreditations are for the level of debt expertise a debt settlement company has on their staff. Each debt specialist should be certified and be a expert in the debt settlement field.

Proven Results

Check to make sure that they have a hefty list of clientele. You don’t want to go to a company that has little experience in settling debts because they won’t be able to get you the best settlement. Also look at their recent settlements, did they save their client a significant amount? Have they worked with multiple creditors before?  What’s the highest amount of debt that they have settled?

These are all questions you should consider before choosing a debt settlement company. If at anytime you are doubting the legitimacy of a company, investigate it a little more and ask more questions. The more you know the better prepared you will be when you finally enroll into the debt settlement program.

No Up-Front Fees

Debt settlement companies are not allowed to ask for upfront fees and if they do, then that is a red flag that you aren’t dealing with a credible company. Legitimate debt settlement companies get paid after your enrolled debts are completely settled and paid off.

Any company that tries to pressure you or push you into a debt settlement program is also a red flag. You want to feel comfortable and reassured when you enroll into a debt settlement program because the process can take anywhere between 2-24 months. The process can be lengthy and you don’t want any surprises especially when it comes to paying off debts.

Debt Settlement is the Best Option

A debt settlement program is one of the top options for anyone suffering with a huge debt load. Settling debts can be a lengthy process but in the end not only will you be free of any enrolled debts but you will also improve your credit score by a serious amount of points.

When making a final decision on a debt relief option it is important to do your research, weigh all of your options and be aware of your choice. You want to know what type of debt relief program you are entering into and know the results of your decision.

Make sure to stay committed to your choice and in no time your personal finances will improve and you will be on your way to a debt free future.

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