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HomeBlog Debt SettlementThe Basics of Credit Card Debt Settlement
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The Basics of Credit Card Debt Settlement

January 2, 2013 by National Debt Relief

man holding multiple credit cardsCredit card debt settlement is the process of negotiating with the credit card companies to reduce the amount of debt owed in return for a lump sum payment. However, credit card debt settlement is not for everyone. As a matter of fact, most creditors will only agree to negotiate with you if you are several months behind on your payments. If you are current on your credit card payments, you shouldn’t waste your time trying to negotiate with your creditors as there is no reason for them to listen to you. If you believe debt settlement might work for you, it’s important to learn the basics. That way, you’ll be in a position to make an informed financial decision.

Debt settlement vs. debt consolidation

Debt settlement is often confused with debt consolidation. The former means negotiating with your creditors to reduce the total amount of your debt you. In contrast, debt consolidation means combining all your debts into one loan. While debt settlement will reduce your total debt significantly, debt consolidation won’t. It just moves your debts from one set of creditors to another. The decision to choose debt settlement or debt consolidation will depend on your specific needs.

A debt settlement company

Many people who choose debt settlement go through a debt settlement company to negotiate with your creditors on your behalf. Although you can personally negotiate with your creditors, it is better for most people to use a debt settlement company because it will have professionals who’ve been negotiating with credit card and personal loan companies for many years.

You’ll have a debt counselor

If you choose a debt settlement company to negotiate on your behalf, you will be assigned a debt counselor. The counselor will help you develop a debt settlement plan. In most cases, the counselor will suggest you stop making payments to your credit card companies and instead make payments to a trust account that is set up by the debt settlement company. That money will later be used to pay for the settlements the company negotiates on your behalf. Since you’re already late on your credit card payments, ceasing to make them shouldn’t create much of a problem. Some credit counselors will only begin negotiating with your creditors after you’ve accumulated enough money to pay the settlements. If you want to get out of debt as soon as possible, you will need to increase your payments to the trust account.

Debt settlement isn’t free

The debt settlement company will charge you a fee for its services. Some companies will also charge you a percentage of the settlement amount or a percentage of the money that was written off by the credit card company. It’s important to understand the company’s fee structure before contracting with it to settle your debts.

The negatives of debt settlement

Although debt settlement can help you get out of debt, it does have some drawbacks. When you fall behind on your credit card payments or stop making payments to the credit card company, your credit score will be adversely affected. It would be advisable to first ask yourself whether debt settlement suits your needs. If you are current on all your loan payments and you only want to make one monthly payment instead of several you’re making now, debt consolidation might be a better choice.

The main advantage of credit card debt settlement is that you will pay a smaller amount than what you owed your creditors. Once your debts have been cleared, you will have a better, debt free life.

Do you qualify for debt consolidation?

National Debt Relief
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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Moderate National Debt Relief Caller: Charlotte Transcribed WE 1/17/2021 Charlotte: I am calling because I wanted to ask a few quick questions about your experience with National Debt Relief [unclear 0:00:27]. JOSE: It’s good. Charlotte: Now before I begin, I have to let you know that our call is recorded. Can you tell me what actually made you decide to work with [unclear 0:00:40] National Debt Relief as opposed to other providers? JOSE: Good. Charlotte: What made you decide to work with National Debt Relief, as opposed to other debt relief companies? JOSE: Aside from your reviews, I’m guessing the success of the reviews. Charlotte: Tell me about the service and the program that National Debt Relief signed you up for? JOSE: I was able to collect all my debt into one chunk and then pay it off. Also was able to get settlements lower than what the balance was. Charlotte: How easy or difficult would you say the enrollment process was? JOSE: It was pretty simple. It wasn't difficult at all. Charlotte: Now is there anything about the process that you feel could have been improved? JOSE: Not at all. I think everything went smoothly. Charlotte: Perfect. Can you give me a little feedback on your experience with your negotiator? What did you think about your negotiator? JOSE: Negotiator was really firm and fair. Charlotte: Do you happen to remember the name of your negotiator by chance? JOSE: I do not, actually. Charlotte: Okay. Is there anything about that representative stood out [unclear 0:03:04] at all? JOSE: No, not at all. Charlotte: Perfect. How comfortable did you feel working with the negotiator through this process? JOSE: Very comfortable. Charlotte: Perfect. So if you had any questions or concerns, how did the negotiator work with you to resolve any questions or concerns that may have arisen? JOSE: At this point, I really didn't have any concerns at all. So, I mean, been doing a great job. Charlotte: Awesome. So if you were gonna rate your experience with National Debt Relief so far, on a scale of maybe one to five, and five would be that you would recommend to friends and one is you were pretty dissatisfied, how would you rate them? JOSE: Is 5 the highest? Charlotte: Yes, 5 is the very highest. JOSE: Okay. Then we’ll go with 5. Charlotte: Would it be okay if I posted your comments as a review on our public web site for National Debt Relief? JOSE: Yes. Charlotte: I will also send over a link so that you can have it as a record for yourself as well. And I have you at salvipride673@gmail.com. JOSE: Yes. Charlotte: How did National Debt Relief work with you as far as setting up a payment [unclear 0:04:45]? JOSE: They did pretty good. Like I said, I have no complaints at the moment. Charlotte: How comfortable were you with the amount that you were paying? JOSE: Very comfortable. Charlotte: Perfect. Now as far as your thoughts on the cost in relation to the quality of service you received at National Debt Relief, what would you say about that? JOSE: The service team was all right. Charlotte: Now if you were going to rate your experience on a one to five, five is that you would recommend to friends and one is you're pretty dissatisfied, how would you rate them? JOSE: 5. Charlotte: Perfect. Would it be okay if I posted a few of your comments to our website? JOSE: Yes. Charlotte: Now if a friend or a family member were asking you about National Debt Relief, what would you say? JOSE: Really great people to work with. Very quick and easy, very responsive, no issues. Really makes you feel like they’re there for you. So not a scam at all. Charlotte: Perfect. Now about where are you in the process at this point? JOSE: I've already had two creditors resolved already. Pretty happy about that. Charlotte: And of course, our call is recorded.

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