Credit Card Settlement: How To Calculate And Negotiate With Credit Card Companies

Many consumers are overburdened with a lot of credit card debts, but do not know how to pay off fast. They have to endure countless harassing phone calls at home and at the workplace by collection agencies. You need to learn how to negotiate with your creditors – banks or even accredited online lenders, so that you can get rid of debt collectors which affects your personal life.

Credit cards make it very easy to sink into debts because of their high interest rates – you find it harder to pay off your debts as time passes by. Many consumers do not realize the danger until it is too late and they are already carrying a big balance month to month. When you start to exceed your credit limit and there is no money to revolve on your account, things start crashing down fast.

If you are still able to pay the minimum amount every month, that is not something to be happy about because you are not reducing the total debt at all. The minimum amount covers only the interest fees so you can still owe the banks $10,000 after paying this for 10 years. On the other hand, some people think that the only way to settle credit card debts is to pay in full in lump sum. Obviously this is very difficult unless you sell off some valuable asset to get the fund. The truth is that you do not have to take such drastic measures and you can pay the debts via monthly installments. If you are determined to pay off your cards, the first step is to calculate your total debt and payments, negotiating a settlement amount with your bank, and closing the deal.

Step By Step Instructions On How To Negotiate Credit Card Settlement

1. Call the credit card customer hotline and ask for a copy of all monthly statements and payment details.

2. Calculate the total amount you have spent and the total amount of payments made. Next find out the amount of interest the bank has charged on your balances. For example, my credit card limit is $10,000, my total expenses is $8,000, the total amount of payments I have made is $5,000 and the outstanding balance is still $8,000. Do you think this is a fair amount of credit card interest to pay?

How To Check If The Credit Card Settlement Letter Is Authentic?

Some credit card debt collectors will actually generate fake debt settlement letters to make you pay more, so you need to check the authenticity and validity of any credit card settlement letters received. Make sure you go down to the bank to settle the balance in person using a demand draft. Keep a photocopy of the demand draft as proof. Do not pay in cash or personal check for your settlement, because you cannot get a final settlement letter in return. This is exactly what my friend working at a legit debt consolidation firm has revealed to me.

Insist on seeing the debt settlement letter before you hand over the demand draft. You want to check its authenticity, because that is the most important proof that you have settled all your outstanding debts with the bank. Call up the bank’s customer care and check if a settlement letter has been generated from your account. Confirm the reference number printed on your settlement letter, as well as the stated settlement amount, date etc. Only when you are satisfied with the debt settlement letter’s validity do you give them the demand draft.

Settle Credit Card Debt Easily without Filing Bankruptcy

This is how you can stop credit card interests from snowballing and settle your debts with out filing bankruptcy. You can also close your accounts to prevent poor money management issues again. Switch to debit cards for easy control of your expenses.

You do not need to pay money for debt settlement companies to negotiate with the banks for settling your card debts. All forms of credit card settlements will result in temporary credit damage, since you are reducing the amount to be paid back, this can be reversed once you are debt free again. Meanwhile, you may be denied of new loans until you have repaired your FICO score. If you are not comfortable with the debt settlement terms and conditions, have a lawyer examine the agreement documents before you proceed. There you have it, negotiating for a credit card settlement yourself was not so difficult as you initially imagined to be.


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