Let’s face it. Credit cards can be a lot of fun. There you are walking through your favorite big box store and lo and behold you see the latest smart phone on sale. You don’t have the requisite $199 but you do have a credit card. No problem. Just pick up a smart phone, lay down your credit card and off you go.
That is, credit cards can be a lot of fun unless you let them get out of control, in which case they can turn is a nightmare. If you’re typical, you get two, three or even more credit card offers a month with such wonderful terms and interest rates that it’s just impossible to not take advantage of them. But then, before you know it, you have half a dozen credit cards and owe more than $15,000. Ouch.
If you can make only the minimum monthly payments
Did you know that if you make only the minimum monthly payments on those credit cards that you may never get out of debt? You need to take a look at all those cards and compare the amount of interest you’re being charged versus your minimum monthly payment. You may find that it is only enough to cover the interest you owe. If this is the case, you will literally never get out of debt. In fact that little box you can check about a minimum monthly payment is really the credit card company’s attempt to keep you in debt.
When credit card debt becomes hopeless
If you are to the point where you have a problem opening up your credit card statements each month and feel that your debt has become hopeless, you could actually negotiate with your credit card providers. If you’re good at both negotiating and smart you should be able to get your balances reduced – maybe by as much as 50% – so that you could be out of debt in just 2 to 3 years.
How this works
The way this works is that you basically have to stop making any payments at all on your credit cards for at least six months. This is because the credit card companies just won’t negotiate until you’ve missed this many payments. Once you have, you can begin contacting the credit card companies and offer to settle your debts for $.50 on the dollar. Believe it or not, most credit card companies will agree to this but only under the following two circumstances. First, you have to be able to convince them that it’s either this or you will file for bankruptcy and they will get nothing. Second, you have to have the cash in hand to actually settle the debt. In other words, if you negotiate one of your debts down from, say, $5,000 to $2,500, you have to have the $2,500 in hand to wire to the credit card company that very day or to send it a cashier’s check.
You have to be a good negotiator
Negotiating with a credit card company is not for the faint of heart. They have tough-minded employees who are very experienced at negotiating with people like you. To negotiate successfully, you have to understand that you need to give a little to get a little. In other words, the person with whom you are negotiating may not accept your first offer. You need to be willing to do a little “horse trading” so that instead of getting your debt cut in half, you might have to be willing to settle for a 40% reduction. It’s also important to understand that the credit card company is in the better bargaining position. This is why it’s important to be able to convince them that it’s either settlement or bankruptcy as this is what strengthens your bargaining position.
Finally, know your bottom line. If you have determined that it’s absolutely necessary to settle a $5,000 debt for $2500, you have to be prepared to not budge below this. In the event that the credit card company refuses to negotiate with you or to reduce your debt by this much, you have to be prepared to just walk away and maybe do what you had threatened – and file for bankruptcy.
If you’re not a good negotiator
If you feel you don’t have great negotiating skills, you could let us do the negotiating for you. Our debt counselors can negotiate for you and probably save you thousands of dollars. Plus, most of our clients get debt free in 24 to 48 months. Call us today for more information.
I am an associate at National Debt Relief, which is a Debt Consolidation Company that has helped thousands of Americans facing credit card debt problems. We help with debt settlement, debt management, and other debt related financial crisis' facing consum