Are you are fed up of being harassed on the phone by your credit card issuing bank and want to stop debt collectors from threatening you at home? Many consumers are struggling to pay off credit cards because of their high interest rates and state of the economy. If you have fallen behind, or fear that you will fall behind on payments, Credit card settlement could be an option for you. It is possible through negotiations with your creditors to become debt free in a very short amount of time.
If you opt for credit card settlement, here are simple steps that could help you negotiate and finalize credit card settlement.
- Gather statements from all your unsecured credit cards and put in order from lowest to highest.
- Total all your balances and multiply by 60%. This is the average credit card settlement for a consumer settling on their own. (ex $20000 total x 60%= $12000)
- Take that new balance and divide by the amount of months you hope to be debt free by. (ex. $12000 / 24 months= $500)
- That number would be the amount that you must set aside each month to insure that you are debt free within your goal.
- At this point, you must cease any payments to your creditors and “starve” your accounts to insure settlements. Once you have 60% of your lowest debt, reach out to your creditor and request a settlement.
- Negotiate with the bank just how much you can pay and once both parties agreed, the deal is then closed. Make sure to state an amount that you are really capable of paying.
- DO NOT send creditor any money until you have a credit card settlement letter in hand.
Once you have received the credit card settlement letter, contact the bank’s customer service representative and confirm if there is any credit card settlement letter created from your account. Make sure to also verify the reference number on your credit card settlement letter.
You should remember that credit card settlement and other forms of debt settlement vary from person to person and case to case. Before you initiate any settlement agreement or deal, it is advisable to seek professional assistance. Though credit card settlement can be done by a consumer, it is strongly recommended to use the service or professional negotiators.