Negotiate credit card debt » High Interest Rates

How To Avoid Bankruptcy & Get Out Of Debt Faster Using Debt Negotiation!

admin — Wed, 23 Jun 2010 08:31:57 +0000

Has credit card debt got you thinking about bankruptcy?

You’re not the only one these days. Even with the new bankruptcy laws, credit card debt continues to climb. Unfortunately for most of us, our paychecks don’t climb as quickly.

If you’re on the verge of bankruptcy, you may have another alternative.

Debt negotiation is a process where you negotiate with your creditors to pay off your debts at a reduced amount – for example, if you owe $12,000, you can negotiation a payoff of $5,000. The benefit for the creditor is that they get more money than they may have through bankruptcy, and they get the money sooner. The benefit for you is obvious – you get out of debt faster, and save lots of money in interest.

Where do you get the money to pay off the debt?

Take the money you would have normally used to pay your credit card bills, put it aside, and when you accumulate enough to pay off the debt, send in the reduced amount you agreed to.

If this sounds confusing, that’s ok. It’s really not.

There are many professional companies that will do all the work for you, and charge you a percentage of the savings.

I can speak from experience (I built up a lot of debt trying to start a sporting goods business, which didn’t quite work out) that even with the fees, this is a good deal – plus you save a lot money by not having to pay the high interest rates on your credit card bills.

Sure, it is a more aggressive approach to getting out of debt than making minimum payments, using credit counseling, getting a debt consolidation loan, or borrowing from a friend or relative. But in the end, you’ll get out of debt faster…

And avoid bankruptcy!

If you’ve never heard of debt negotiation (also called debt settlement), that’s ok too, not many people have. I didn’t until I began to seriously consider bankruptcy.

One reason many people are hesitant to consider debt negotiation is that it goes on your credit report. Sorry to tell you, but having lots of debt (even if you pay on time), making payments late, even credit counseling – all go on your credit report and can negatively effect your credit. And (of course) bankruptcy is a big negative!

In my case, getting out of debt, removing all the financial stress, and being able to live a normal life were well worth it. With so much debt, having good credit was meaningless anyway.

Plus, I was able to get all but one of the negative items off my credit report (that’s a topic for another discussion), and my credit is now back to normal. In fact, I now get more credit card offers than I can handle – and fortunately, I can now throw them all in the trash!

When money is tight, and debt is high, there aren’t many simple answers.

But if you are already considering bankruptcy, then debt negotiation might be the right alternative to help you get out of debt faster!

By: Kris Bickell

Facts About Credit Card Debt

admin — Mon, 19 Apr 2010 12:06:36 +0000

Credit cards are instruments that are used when you are carrying very little cash with you. They are also meant for emergencies, such as paying for medicine or hospital bills. Credit cards should be a means to control your spending because each expenditure is reflected on your credit card bill. Unfortunately, these days, owning a credit card means having carte blanche on spending for everyday expenses such as groceries, utility bills, car payments, and even luxury items that have no place in the budget. Over time, these credit card bills add up to an exorbitant amount that you’ll discover you can hardly pay.

Having a credit card means you are availing of one of the worst kinds of credits because credit cards charge very high interest rates. This is especially true if you are in the habit of paying only the minimum amount due on your credit card bill. It is even worse off if you are late in making payments as the penalty rates are higher still. Cutting your credit cards and paying them off completely would be one of the best decisions you can make for your finances.

There are some credit card debt facts that you need to know if you want some debt help management for your growing credit card debt. If you absolutely necessarily require the use of a credit card, pay-off the ones with the highest interest rates and stick to only one credit card that charges a low interest rate. A zero interest card is your best bet. Paying low interest rates on your credit card is the best way to go.

To avoid paying any interest at all, pay your total amount due each month. Paying your bill in full not only gets rid of the lingering worry you will get from the thought of that remaining amount on your balance, it will also ensure that you don’t pay any interest charged for paying the minimum amount, or a portion of the total bill. This interest adds up, you’ll be surprised how much.

To avoid any danger of missing your due date, pay off your bill way before it falls due. The penalties charged for late payment are even more exorbitant compared to the interest charged for paying less than the total amount that is due. Consistent late payment will get you in trouble with the credit card company and you may end up in their delinquent files for paying your dues way beyond the due date. What’s more, this will have an adverse effect on your credit score, as well.

Once you have weaned yourself from having a number of credit cards, paying only the minimum amount on your credit card bill, and avoiding making late payments on your credit card, you can embark on a method that will help keep you from going on another spending spree – start using cash.

With these credit card debt facts, you’ll be able to cull your credit card spending, lower your outstanding credit card debt, and finally achieve financial freedom.

By: Cary Anderson

Is Credit Card Debt Settlement the Way to Go?

admin — Thu, 08 Apr 2010 22:50:41 +0000

If you currently face a financial crisis due to unforeseen hardship, you may have considered settling your debt. But, how do you know credit card debt settlement is the right way to go? With careful consideration and planning, it may be the best option to get out of debt.

What Does It Mean to Settle Debt?

You may find yourself paying minimally on your credit card each month, only to find that the next month you owe more than you did previously. It is an vicious cycle caused my high interest rates and late fees. Debt settlement stops this process and allows you to negotiate a lump sum payment to your creditors. However, you must stop all payment in order to get debtors to cooperate with you.

Once you stop payments, your debt settlement company will work out a deal with your creditors. Rather than taking out a loan, you negotiate down what you owe to a reasonable amount that satisfies both parties.

By working with your creditor to repay your loan, you regain their trust and begin rebuilding your credit. Due to the current economic crisis, more and more credit card companies are will to settle with consumers. Remember, debt settlement is only good for credit cards. You may not settle debt for other financial obligations such as students loans, mortgages, or car loans.

How Does the Debt Settlement Company Work?

Typically, debt settlement agencies have a long-standing relationship with creditors and can settle debt quickly. They work on your behalf to settle debt for a lower percentage than what you owe so long as you agree to make monthly payments on time. They are able to negotiate a payment between 35%-50% of the money owed.

The company will charge an upfront fee for services. Once your fee has been paid and you have stopped paying all creditors, negotiations begin. Once you negotiate, you begin redirecting your payments to the settlement companies.

Remember that some creditors will strongly resist settlement. Though you are most likely to settle all debt, some may be more difficult than others to negotiate down.

How Do I Find a Debt Arbitrator?

Finding the right company to advocate on your side may seem tricky. However, by checking references and reviewing compliance on the BBB website, you are sure to find the right representative for your needs. Research several agencies before settling on the right one.

By: Hector Milla

3 Ways to Pay Off Debt Fast

admin — Wed, 10 Mar 2010 23:59:26 +0000

If you’ve got debt, you’re not alone. Surveys have found that the average person carries about $8,000 on their credit cards, and most people also have car loans, a mortgage, student loans and more. Paying off credit card debt should be your first priority, however, since credit cards typically have high interest rates. Here are three ways to quickly whittle those balances down:

Drop your rate

The average credit card interest rate is about 14%. But many credit cards feature a special, low-rate introductory offer, such as 0% for six months. Transfer your balance to a low-rate card, and more of your monthly payment will be applied to your principal rather than interest, which drops your balance faster. If you can’t find a lower rate card, try calling your current credit card company and asking for a lower rate.

Boost your payment

Making just the minimum payment on an $8,000 balance means it could take more than four years to pay off your debt if you have a 0% interest rate. Paying more than the minimum is the best way to pay off your balance quickly. Send in an extra $100 a month and you’ll be free of credit card debt in a little more than 2 years. Send in an extra $200 a month and the balance will be paid off in just 20 months.

Consolidate it

If you find yourself in need of extra help, consider a loan consolidator or debt negotiator. These professionals can help you negotiate with credit card companies for a lower interest rate or even a new debt amount. A successful negotiation can help cut the amount you owe down to 80%, 70% or even 60% of the original total, and lowering your balance means you’ll be able to pay it off faster.

Try using one of the recommended debt consolidation lenders at ABC Loan Guide in order to make sure the lender is reputable.

Once you’ve paid off your debt, make a conscious effort to stay debt-free. Avoid using your credit cards unless you can pay off your balance each month. Use only cash or debit for everyday purchases, and save up your money for big purchases like appliances and electronics.

By: Carrie Reeder

Debt Consolidation Versus Debt Negotiation

admin — Fri, 17 Apr 2009 13:04:21 +0000

Debt consolidation versus debt negotiation are two options that are available to you if you need debt assistance. When your monthly bills become too much for you to handle, it makes sense to use debt consolidation or debt negotiation for solving debt and credit problems.

Debt Consolidation

Debt consolidation services have prearranged debt repayment plans with most credit card and collection companies. When you sign up with a debt consolidation company you are offered a lower overall monthly payment based on a lower interest rate they have arranged with the creditor.

This payment is lower than what the credit card companies offer you, saves you money every month and is often the best way to consolidate debt.

One benefit of a debt consolidation repayment plan is it will stop you from getting harassed by your creditors as long as you make the new, lower monthly payments.

The downside of the debt consolidation repayment plan is that you have to cancel all credit cards that you include in the plan. You are also charged your first payment you make toward the program and an additional monthly administration fee. This administration fee ranges from flat fees of $10-$50, while others charge a $5 fee for each creditor. That means you’ll pay about $30 a month that doesn’t go to paying off your debts.

The debt consolidation program benefits you if you have high interest rates or have higher credit card bills than you can manage. Some people like to make only one payment to one company for all of their debts.

Debt Negotiation

Debt negotiation is sometimes referred to as debt settlement. This is most often offered to people who can’t handle a debt consolidation program. If you can’t make the minimum payments of a debt consolidation repayment plan or haven’t made payments in the past 3 months, a debt negotiation program is the next step for solving debt and credit problems.

One benefit of a debt negotiation program is you stop making payments to your creditors. The debt negotiation company either takes monthly payments from you and keeps it in an account, or lets you keep the money in your own account.

While you are making these monthly payments to the debt negotiation company, they negotiate with your creditors for a lower payoff of around 40-50% of your total amount of debt. Once the negotiated settlement is agreed upon with your creditors, the debt negotiation company makes a one time payment to them.

A downside of the debt negotiation program is it lowers your credit score for as long as you are in the program. However, most debt negotiation companies require the creditor make the credit report show paid in full so it doesn’t show up as a negative on your report once your account is settled.

Some debt negotiation companies include a credit repair service that will remove the negative items caused by the debt negotiation program. You pay for this service as part of their program.

Now that you have an idea what debt consolidation versus debt negotiation is choose which one will work best for solving debt and credit problems for you.

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Negotiate Credit Card Debt – Preventing Collection Agency Harassment

admin — Thu, 29 Jan 2009 22:44:35 +0000

Credit card debt is one of several debts that can easily cause creditor harassment. There are several reasons why.

o It is unsecured and creditors tend to increase interest rates considerably.
o Creditors tend collect only by force.
o It has the tendency to balloon because of the high interest rates.
o It has the tendency to be misused or abused.
o There is the possibility that payment cannot be prioritized.

Debtors have the tendency to hide because there is no property or goods that are attached to the debt. On the other side, creditors tend to intensify their collection. They would make ways to reach the debtors and collect the debts. Creditor harassment can be considered common in credit card debt cases. To stop all these and for fair treatment, debtors can actually negotiate credit card debt. This could be a fair and practical solution against debt collection harassment.

Prevention by Negotiating

Being frequently called by your creditor and being visited by credit agencies is stressful. They call you or visit you to collect money from you and you have nothing to give. You sometimes have the tendency to hide. But if you do so, they call you in the wee hours or even late at night or visit you at the most unpleasant time. For most credit card companies, they tend to get impatient and irritated that they have the tendency to insult or threaten you. This is the start of creditor harassment. If you know that you have problems with your credit card, you need to confront the problem head on and negotiate debt. You don’t have to wait until your creditor harasses you.

How to Negotiate

Negotiating is easier than you think. In fact, it is easier than hiding, as it’s a fact that creditors will still do anything to reach you and collect money from you. If you can negotiate credit card debt, you are able to find a solution to your delinquency and creditors are more than happy to cooperate with you.

When you negotiate credit debt, all you have to do is talk to the credit card company. Inform them of the reason for default and tell them of your willingness to settle your debts. When doing this, be sure to know your rights and be equipped with possible solutions that best suits you. Credit companies may offer you seemingly viable solutions only to find out that it only works for their best advantage rather than considering your condition. Read as many resources as possible regarding credit card debt solutions and credit card debt counseling so that you will not be swayed by any offers by the credit company.

If you can negotiate credit debt, you will surely be able to prevent creditor harassment. Even so, you still need to be equipped with what to negotiate with while taking into consideration your current condition and your capacity to pay. By equipping yourself, you will not be swayed by any sales talk for debt solutions that works at the full advantage of the creditor. Otherwise, you may be more harassed than you think if you find out that the solutions that the credit card company offered were not acceptable or way beyond fair conduct.

By: Arjun Collier