Finance And Business | Tips For Settling Your Credit Card Debt :: By ...

These days there are a lot of inviting commercials on the TV promising to help you out of your credit card debt by settling it for far less than what you owe. They mention no methods and only show the results; a debt of ten thousand dollars reduced to only a few thousand, or a debt of thirty thousand settled to less than ten. If you have more than ten thousand dollars in credit card debt, these commercials seem heaven sent. But can they deliver what they offer, and should you even settle in the first place? To answer that, let?s look into what happens when you settle your credit card debt, and see if it?s something that will benefit you in the long run.

The first thing to understand before considering settling your credit card debt is that it will negatively impact your credit rating, no matter how much you end up paying. The simple fact is that you have a debt which you can no longer pay for, which is a bad thing when it comes to credit ratings, and it means that financial institutions will be less willing to loan you money in the future since you?ve already proven you?re not reliable enough to pay it back. It also doesn?t matter what means you use. Whether you settle by choosing a company that helps mediate debt or contact your credit card company directly yourself, if you settle on your credit card debt your credit rating will go down, often dramatically. If a debt settlement company tells you they can settle for you without any negative impacts to your credit rating, they are lying. Once the settlement begins your credit rating is going to take a serious hit, one that is often nearly as bad as the one following declaring bankruptcy. That is simply how the financial world works.

Another thing to consider is whether or not you qualify for settlement on the debt in the first place. Most credit card companies only offer settlement in the case of individuals who have legitimate reasons to be unable to pay off a debt- a divorce, a death, a catastrophic loss of property, a job loss, an injury that leads to an inability to work. A temporary setback in your life (say, the loss of your job) is something the credit card company may even work with you to defer your payments for a short time until you can afford to pay them again, and then you won't need to settle at all. Credit cards companies do not settle debt with individuals who have racked up a huge amount of debt and simply do not wish to pay it all back. If you don?t know whether you qualify for settling your credit card debt, ask your credit card company. Just asking the company about settling your debt won?t affect your credit score- that only happens when the settlement officially begins.

If you decide to settle, you need to know that you can work with your credit card company yourself with no middleman. There is no legal or practical reason that you can?t handle the settlement yourself without the help of a debt settlement company. However, some people don?t enjoy dealing with companies directly and would prefer to do it through a debt settlement company, which makes choosing a good one imperative.

Although those commercials on late night TV make using their particular service seem like a good idea, remember that not every debt settlement company is the same. Some are legit, some are not. All charge a fee for their services, and these vary from company to company. Some charge a percentage of what you owe, and that can leave you back where you started- you want to get out of debt, not get into more debt. If you choose to handle settling your credit card debt by dealing with one of these companies, do your research beforehand and be very careful about the company you choose.

Consider looking for a company that is registered with TASC- The Association of Settlement Companies. It?s a regulatory body for debt settlement companies that require its members to hold to high standards of business practices and ethics. Read all the fine print, ask questions, and above all, remember the old adage- if it sounds too good to be true, it probably is. Hopefully this article has helped you decide whether or not you really want to pursue settling your credit card debt, and whether it would be a good plan for your particular situation. Good luck in whatever you decide!

About Author Jacqueline Harris : If you have excessive credit card debt, now you can eliminate it using successful budgeting and money making strategies, debt settlement, debt consolidation, debt relief grants, and much more. Visit http://debtreliefgranthelp.blogspot.com/ today and get yourself out of debt!

Article Source:?http://www.BharatBhasha.com
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Article Added on Sunday, September 11, 2011

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