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HomeBlog Debt SettlementPros and Cons of Charge Card Debt Settlement Program
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Pros and Cons of Charge Card Debt Settlement Program

February 16, 2012 by National Debt Relief

American families are now facing more problems with debt than ever before in our nation’s history. I have seen reports that the average American household is now carrying $19,000 in debts. Just imagine, $19,000 in debts! If you had that much money in the bank, you could pay cash for a new car.

The warning signs

There are two big danger signs that you have a serious problem with debt. The first is if you have to use your charge cards to buy everyday items such as groceries or gasoline where before you were able to pay cash. The second is if you have had to resort to payday loans.

Bankruptcy as an option

Many people who have found themselves in these circumstances have turned to bankruptcy as a solution. The reason for this is that a Chapter 7 bankruptcy allows you to keep some of your major assets, including your house, automobile and working tools. The downside of filing for bankruptcy is that it will stay on your credit report for seven to 10 years, which can make it very difficult for you to get new credit or a new loan of any kind.

 Charge card debt settlement

A good alternative for many families–instead of filing for bankruptcy–is called charge card debt settlement.

The way this works is that you go to your creditors and ask them to reduce your debt. You can even do this in the case of credit cards, as they are a kind of loan. When you approach a creditor, you need to make it clear how difficult it would be for you to make even minimum monthly payments any time in the near future.

In some cases, the creditor will be willing to work with you to develop new terms so you could repay the debt in a timely fashion. For example, interest charges and late fees can increase debt substantially. If you can get a creditor to lower your interest rate and waive the late fees, you may find it much easier to repay your debt. Creditors can be flexible because they know that if they refuse to work with you, you may decide to declare bankruptcy, in which case they would get nothing.

Professional debt settlement

You could approach your creditors yourself and try to negotiate settlements. However, it’s important to understand you will be negotiating with experts–people who have years of experience in debt settlement. They are very skilled at saying “no” and in negotiating settlements that are much more favorable to them than to you.

This is why many families have turned to professional debt settlement companies. These companies have counselors who are skilled at negotiating with the credit card companies and have good working relationships with them. In most cases, a professional debt settlement firm will be able to get your debt reduced by as much as 50% to 60% and negotiate lower interest rates so that you can be completely debt-free in as few as 24 to 48 months.

Choosing a debt settlement company

It’s important to choose a reliable, ethical debt settlement company. It might be tempting to sign up with the first company you come across. But you should check the company’s history and qualifications, customer complaints on forums and its testimonials from satisfied customers–just to make sure it is an honest and upright company.

The cons of charge card debt settlement

While charge card debt settlement can get you debt free in a reasonable amount of time, it’s important to understand that it will have a negative effect on your credit rating. You will probably have to stop making payments on your credit cards for around six months before your credit card companies will be ready to negotiate. And any time you stop making payments on credit cards for that long, it’s bound to have a negative effect on your credit.

Do you qualify for debt consolidation?

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National Debt Relief

National Debt Relief is one of the largest and best-rated debt settlement companies in the country. In addition to providing excellent, 5-star services to our clients, we also focus on educating consumers across America on how to best manage their money. Our posts cover topics around personal finance, saving tips, and much more. We’ve served thousands of clients, settled over $1 billion in consumer debt, and our services have been featured on sites like NerdWallet, Mashable, HuffPost, and Glamour.

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Easy National Debt Relief Caller: Austin Transcribed WE 1/17/2021 Austin: Our call may be recorded. What led you to National Debt Relief and why did you choose National Debt Relief over a different company? CARA: Honestly, it was just kind of on a whim. I just saw a commercial, I think, and then looked it up. And we were just tired of living paycheck to paycheck and not feeling like we were getting anywhere with our debt. Austin: What were your thoughts and was wondering as far as like the enrollment process, what process or where are you at this point in the process? CARA: We are almost done. Well, they've paid off almost everything or we've paid off almost everything. We're working on our last credit card. So I think our last payment will be in December, so nearing the end. Austin: Do you remember the name of the negotiator? I'm sure you've probably worked with a couple of people, but what's the name of the negotiator that you worked with? CARA: Well, I didn't really, I guess really work one on one with like one negotiator. I don't think. We just got email saying, "This is where we're at with this. Do you agree?" you know, type situation. Austin: Do you feel that there's anything that maybe the negotiator did well or anything that they could have improved? CARA: No, I don't think so. Nope, I don't think so. We've been happy with everything so far. Austin: Have you seen any positive impacts from working with National Debt Relief, just to kind of notice any changes to your life? CARA: I mean, definitely less stress, and then we've just been able to be better about our spending and our budget and everything. It helped get us on track. Austin: How would you rate your experience with National Debt Relief on a scale of one to five, where five means you would recommend to friends and one means very dissatisfied? CARA: I'd say 5. Austin: Would it be okay if we shared your comments as a review on our public site with a first name and city only, they're for National Debt Relief and to help other consumers make good choices? CARA: Probably not. I live in a smaller area. If anybody were to hop on and say Cara from Beddington, they would probably know. Austin: We can definitely remove that 'cause we very much respect your privacy. So we can either remove the name and just do a ‘C’ or completely remove the city and just do like ‘Cara from the USA’ whatever -- mainly comments than identifying you, I guess would be important. CARA: Yeah, I don't care if you use like my name and just put USA. I just don't -- where I live, it's not a very big area. Austin: I can totally respect that. Not a problem at all. CARA: Yes, we are a little bit of ashamed of having to go this route, but it was what was best for our family at the time. Austin: Would you like us to email you a link to that review whenever it's published? CARA: Yeah, that'd be great. Austin: Our call may have been recorded.

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Cara Waterman
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