If you have credit card debt and are looking for a way out, it may be tricky to settle your debt. However, if you don’t understand all of the details of what this entails, you could end up making a mistake that causes more problems than it solves. You need to know an average credit card apr before using any credit card.
In this blog post, you will get to know everything you need to know about settling credit card debt: what happens if you do it, how much money can be saved, and how long the process takes.
How does credit card settlement work?
As you can see, credit card settlement is a process of negotiating with creditors to pay less than the full amount of debt. This process is normally done by a third party like a creditor or attorney. It’s important to note that this method doesn’t get rid of your debt completely; it just helps you pay off some of your outstanding balance and avoid bankruptcy.
What kind of debts can be included in a credit card settlement?
A credit card settlement is exactly what it sounds like: a legal agreement to pay off debts you owe with your credit cards. However, these settlements are not available for all kinds of debt—only those that have been charged to a card.
You can settle debts with your credit card company if they’re medical bills, unpaid taxes, utility bills and personal loans (but not student loans). You can also use this method to pay back your mortgage or car loan if you want to get rid of them altogether.
If you’re unsure whether or not your debt qualifies for a settlement offer from your issuer, reach out directly through their website or call the number listed on their site.
Can you negotiate with a creditor directly?
Yes, but it’s not a good idea. The best way to negotiate is with an attorney who can put your interests first. Negotiating on your own can be dangerous because of the other parties involved, especially if they are trying to scam you out of more money or get more information that they need from you.
Should you do it yourself or hire a service?
You can settle it yourself if you have the time and desire to do so. If you don’t, there are companies that offer these services for a fee. This may be an option if the debt is small and you want it gone as quickly as possible. If your debt is large or complex, consider hiring an attorney who specializes in credit card settlement cases.
The cost of hiring a service or professional varies widely depending on their level of experience and reputation within the industry. The typical range tends to fall between $300-$1,000 per hour of work completed on behalf of your case.
As per Lantern by SoFi professionals, “There are several factors that can affect your credit card interest rate. These include your credit score, your credit card type, and whether you have a travel credit card, a student credit card, a cash-back card, or a balance transfer card.”
As you’ve discussed, there are many benefits to credit card settlement and it can be a great solution for a variety of different needs. You may not even end up using the money from your settlement if you don’t need it—but that’s okay! If you do want to use the funds for something, though, make sure you’re not overspending on your new debt.