Saving On Credit Card Bills Through Debt Settlement

Millions of Americans are finding themselves in serious credit card problems mostly due to the poor economic conditions

. But, if you are having trouble paying your credit card bills, you are not exactly helpless in attempting to resolve the situation.

One of the first things that you can do is to transfer your balances to one of your cards with the lowest interest rate. If the amount that you owe is huge, this alone can possibly save you hundreds of dollars in interest fees.

In addition, as much as you can, stop charging purchases on your credit card and only buy what you can afford to pay in cash. Then, as quickly as you can, try to pay down the balances on your credit cards. If you can't afford to make your minimum payment, contact your credit card company and try to get them to wave the underpayment fee for a month or two.

Primarily, it is important that you keep your credit card company in the loop. For example, when you realize that you may be late in making a payment, be proactive and call the company first to explain your situation. In addition, see if you can negotiate a lower interest rate for your card. If so, this will lower your monthly payments possibly to an amount that you can afford.

If you can't negotiate the interest rate, try negotiating some other aspect. Many debtors in really dire straits negotiate with their credit card companies to pay a one time settlement of a reduced amount to cancel the debt. So, if your credit card balance is $10,000, a company may be willing to settle for a lump sum payment of $7,000. Thus, in one fell swoop, you have lopped $3,000 off of the amount that you owe. Of course you have to come up with the lump sum payment, but you may be able to borrow the money to do that.

If you are good at negotiating, you will most likely be able to come up with greater than a 70% savings. You know your expenses better than anyone. If you are honest with the credit card company and convince them, for example, that you can only afford to pay them 50% of what you owe, they may very well go with that. They know if they sell your account to a collection agency, they may end up getting even less than that.

The drawback, however, is that your credit score will be lowered because you did not pay your full debt. But if you are in deep money troubles, aside from bankruptcy, it may be the best option that you have.

Saving On Credit Card Bills Through Debt Settlement

By: Susanna Berlatsky

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