Debt Credit Card Settlements, An Option Safe and Sound?

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Debt credit card settlements are often sought after by those who need help with the staggering money they owe. With the current economic situation only looking more bleak in the near future, more and more individuals and families are having these problems. The use of credit cards has made the situation more complicated and now they are unable to pay their bills.

The individual may try to deal directly with the issuing financial institution or seek assistance through a company that offers advice and help. In most instances it is less expensive to have a professional from a debt credit card settlements firm do the negotiations for him. Safe and sound? Yes, if he does it right.

They have the experience on this matter and they will negotiate an agreement on a more favorable term, usually better than what an individual can negotiate for himself. A high percentage of settlements are in the 30 - 50 % of the outstanding balance. However, there is also a percentage that is due to the company so understand the contract well.


Depending on the amount of debt, the payment schedule may last for a period as short as three to nine months or extended to several years. It is important to understand the terms before agreeing to it. For instance, get the answers to the following questions before finalizing the deal. Here are the questions:

  • Does the interest continue to accumulate on the outstanding balances?
  • What is the payment fee charged by the company?
  • How good is the company's reputation?
  • Will there be a specific person to talk to?
  • Where and when are the payments to be made?
  • What will be the effect of this solution to ones future credit?
  • Will there be a monthly statement tracking the balance and payments?

Payment of the money owed is the first priority but a good, clear understanding of the terms and conditions set forth by the firm is just as important. In selecting the company as ones representative, try to meet with them in person rather than just negotiate by telephone.

Quick tip: Be wary of debt-settlement scam. You will be making monthly payments to the debt-settlement company. They get paid their fees first, the setup fees and monthly maintenance fees and do not pay your creditors.

Do they have an office? Check with the Better Business Bureau for any complaints. Use the Internet to verify information. The amount charged by the debt credit card settlements firm may be a percentage of the negotiated amount with the credit card company, or a percentage based on the reduced amount of the bill. Understand the charges prior to signing any papers.

There is a lesson to be learned in the whole process of debt credit card settlements. Be more aware of ones income and expenses. Can one afford that planned purchase and is it even needed? If the answer in no, don't buy it, especially on a credit card. If your credit is considered bad, you can work to restore it to a better rating. It will take time and considerable effort, but it can be done.

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