Fix Your Credit Card Debt Problems
Credit card debt problems are extremely stressful. You feel like you can't get out from under that mountain of debt no matter what you do.
One thing you might want to consider is credit card debt settlement to fix your credit card debt problems.
This type of settlement is where you contact your credit card companies and negotiate to literally pay pennies on each dollar owed to them in one lump sum, hence the settlement. So how do you do so to your advantage?
In this case you may decide to sit down with a debt consolidator and go over the exact amount of money you have to work with and the amount of credit card debt you have to pay off. This may work well with a debt consolidator or a credit counselor as they can sometimes negotiate more of a deal for you.
However, if you decide to go it alone and try to work out the best deal for yourself then you want to make sure that you get the deal that you want. If you don't, you might nt fix your credit card debt problems and that's the goal, right?
Remember that you do have an advantage here as you have what the creditor wants and that is money.
The main thing is not to give in when they give you the first no. Stay calm cool and collected and above all don’t get angry with them as this will get you no where. Make sure to try to do your negotiations in writing so you have a paper trial to back up what they have agreed to.
So how much do you offer?
Let's take a look at how much the collection agencies really make off of your debt. For debts that have recently been charged off, they get 6 to 7 cents on the dollar. For accounts that are a bit older and have been at a few collection agencies, they get 1 ½ to 2 cents on the dollar and for accounts that have been around for years, they are going to get 1 cent.
So you see, it is not hard to get the deal you want with a credit card debt settlement. Just make sure you stay calm and collected and never raise your voice and you will be sure to keep the upper hand.
* Source: Sean McVity, portfolio broker at Keefe, Bruyette & Woods.
With this in mind, you should always start your offer at 25% or less.
Let's understand the math here. If your debt is $1000, let's say at the most, the collection agencies has paid or will collect 7 cents on the dollar, or $70. If you offer them $250 (25%), they are still making a profit of $180. Remember, the credit card companies are out of the picture at this point. This money goes directly to the collection agencies.