Many people do not have the funds or the ability to payoff their
full credit card debt. This usually damages their status financially so
they find other methods to help them in the process. I strongly
recommend that you analyze your decision to avoid long term damage to
your status financially. Also, there could be legal complications and
ramifications if done incorrectly.
In order to maximize your
credit card debt settlement, I recommend avoiding the following methods
(and mistakes) that I list below. There are many pitfalls on the path
to settlement, and you should be weary of shortcuts. There are proven
methods that work and have worked for many years. When it comes to your
financial future, walk the tried and true path of honesty, integrity,
and transparency.
Terminating the Account
It can be
extremely frustrating not having the ability to meet the rising
interest rate and debt balance. Many find that the only apparent way to
deal with this problem is to terminate the account. This is the
equivalent of fixing one minor problem to then turnaround and create a
major one. What you don't know is that this action causes a major dip
in your credit rating.
A possible solution to this dilemma is to
set aside the usage of the credit card(s). It may be difficult at first
but it is a better solution. Also, make sure you continue to settle any
existing credit card debts while you avoid accruing further damages
through credit card usage.
Consolidation of Debt
As you
know, debt consolidation is a popular method among those who have
issues with debt. Now, this option has helped some, but it is not
always the best path to relieve your debt. For those unfamiliar with
debt consolidation, it is when you find a new creditor to pay off any
of your existing debts. What you have done is created an account with a
new creditor who you will need to settle with. A positive of this
method is you no longer have multiple debts, just one consolidated debt
to pay. You can also negotiate a lower interest rate (but this extends
the life of the loan and payment period).
Remember, with debt
consolidators there are upfront fees, and a statement of third party
assistance will now reflect on your credit report.
In conclusion,
there are more mistakes that can be made while settling your debts.
These are found in paying high interest rates or opting to settle a
minimum balance. In a future article I will write on these subjects.
Just remember, you are in control of your financial destiny. A shortcut
may seem positive but in truth there are always drawbacks. Do your due
diligence and you will be fine.
There are many scams out in the
open market today. With the ease and power of the Internet however,
research is made simple. Any company you use for debt settlement,
consolidation, or otherwise I strongly recommend researching them. What
other business have they done? Do they have any referrals? Do they have
a working contact phone number (not just an email address)? These are
great ways to check and see if a company is legitimate.
By
Eugene Barber
