Credit Card Companies Are Making Deals! - How You Can Capitalize and Eliminate Debt

Credit card loans are unsecured loans and do not have any collateral attached to them

. This is the reason that they have very high rates of interest. The card companies aim at making maximum profit within the first few installments. Once you have overused a card and accumulated a large amount in debt it become very difficult to repay the loan. The loan amount just keeps increasing till the time it becomes impossible for you to repay the loan. In desperation many people start contemplating bankruptcy in order to get rid of massive card loans. However a bankruptcy is harmful for both the debtors as well as the credit card company. The debtors' credit ratings are damaged almost irreparably. Whereas the card company loses all its money as there is no collateral attached to a credit card loan.

This is the reason that when a debtor's account becomes delinquent, the credit card companies proactively offer them the option of debt settlement. Under this procedure the card company assesses the debtor's actual paying capacity and offers a settlement amount. This amount can be paid off as a lump sum or in equated monthly installments. The debtor can also persuade the card company to reduce the interest rate charged on this settlement amount. The creditors usually also waive off the penalty charges. If negotiated well the loan amount can be decreased by almost 50% of the original amount payable. This procedure reduces the burden of loan on the debtor and helps him or her to become debt free in a reasonable period of time. At the same time the credit card company is able to recover at least some of its money.

Once the debt settlement procedure has been completed the debtors can explore options like debt consolidation, conversion of unsecured loans to secured ones etc. in order to reduce the debt even further. The availability of these options enable a debtor to become debt free without having to file for bankruptcy. A debtor can capitalize on the cooperative attitude of the credit card companies and eliminate debt easily.

Credit Card Companies Are Making Deals! - How You Can Capitalize and Eliminate Debt

By: Ansel Fraizer

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