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How to settle credit card debt

Americans struggling with credit card debt isn’t a new thing, but recently it seems as if we’re racking up more debt on our credit cards than ever before. A fascinating article published recently by the finance website Value Penguin argues that national credit card debt is on the rise, despite the fact that less and less people are using credit cards.

“Credit card debt in America has been rising over the last decade. However, despite this, the average percentage of people holding credit card debt has been gradually decreasing. This tells us that the while average credit card debt is increasing, it’s not due to a greater number of individuals spending. Instead, in recent years, more people have been more heavily indebted. In the year 2000, over half of the households in America had credit card debt. By contrast, in 2001, that figure fell to 38% - over 12 percentage points lower. Over this time, average credit card debt rose from $5,048 to $7,697. This means the average American today holds 52% more debt today than they did a decade ago.”

The article goes on to say that the average American household credit card debt was $10,308 as recent as November of 2015. Coping with more than $10,000 of credit card debt simply isn’t manageable for most families, and the fact that many credit card companies have returned to their pre-recession tactics of offering cards with high interest rates to people with low credit scores is surely contributing to America’s debt woes.

Whatever the circumstance, if you owe a significant amount of money on one or more credit cards, it’s an issue you need to deal with now before your debt balloons and becomes unmanageable.

Living with credit card debt makes life more difficult in every way. For example, purchasing a home and ditching your rental is extremely difficult or sometimes impossible if you’re saddled with credit card debt and have a low credit score.

According to the real estate website Home Guides, “Credit cards, and how you use them, are a large part of your overall credit history and score. Lenders not only use your credit score as an indicator of your overall creditworthiness, but they also use your debt to determine your approval as well. Every lender uses a debt-to-income ratio as part of the loan approval process.”

Banks and lenders will be hesitant to loan you money to purchase a home if you have significant debt on credit cards.

Is Settling Credit Card Debt Possible?

Yes. If you’re a person mired in credit card debt, consider having a professional debt settlement company negotiate with credit card companies on your behalf. Here’s how debt settlement works: An experienced debt settlement company uses its leverage with credit card companies to negotiate down your debt.

Debts settlement companies have leverage with credit card companies because they use the debt of often hundreds of clients to increase their negotiating prowess. Credit card companies would much rather get something from you than nothing, so this gives professional debt settlement companies a path toward driving down your debt and saving you money.

How To Settle Credit Card Debt

You can settle your debt right now by contracting a debt settlement company to strategically negotiate with credit card companies. Debt settlement companies often negotiate with the same credit card companies numerous times, so they have a rapport. Debt collectors work on commission, so they have a financial incentive to be open to negotiating.

It might be tempting to take a DIY approach when it comes to trying to tackle your credit card debt, but simply calling up the folks who own your debt and asking them to lower the amount you owe won’t work. Professional debt settlement negotiators know exactly who to contact, and how to get credit cards to lower the amount you owe them.

What To Look For In a Debt Settlement Company

When looking for a debt settlement company, look for someone who has years of proven experience, positive customer reviews and all the necessary accreditations. Many companies out there claim they can reduce your debt, but lots of companies lack the experience, leverage and expertise needed to get the job done.

Your debt is a serious issue, so make sure you’re getting in league with a reputable debt settlement company.

Why You Need To Act Fast

Every day that you don’t address your credit card debt is another day that your debt grows and becomes more and more unmanageable. It’s important to keep in mind that credit cards might seem like a solution, but they exist to as a means for companies to make money.

A 2011 CNN Money article details one woman’s credit card horror story. After a motorcyle accident, the woman received a credit card with 29.9 % APR and a $300 limit, only to receive a letter a few months later explaining that the card’s APR had skyrocketed to 79.9 %.

Interest rates that high are intentionally put in place to create massive amounts of debt at a rapid pace, and unfortunately, it’s a practice that is perfectly legal. If you need a solution for your credit card debt now, you need a professional and experienced debt settlement company that knows how to negotiate credit card debt and will do their best to help you lower your monthly payments.

This is a post from a member of the Freelancers Union community. If you’re interested in sharing your expertise, your story, or some advice you think will help a fellow freelancer out, feel free to send your blog post to us here.

Andrew Macia Andrew is a debt consultant with over 8 years' experience and has helped hundreds of individuals become debt free.

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