Used as a last resort, credit card settlement is a way to negotiate with your credit card company so you can eliminate some of your debt. As nice as this sounds, it should only be used in an emergency situation, and it can only be done if you have a credible reason as to why you can’t pay off the debt. It can effect your credit negatively, but if you’re headed for bankruptcy, credit card settlement may be your only option.
How Do I Settle My Credit Card Debt?
There are times where you can settle your credit card debt yourself, but using a debt settlement service is recommended. These agencies have dealt with negotiating before and can help you get a great deal. Come prepared and let the company know why you need this and that it is important for your financial situation.
Advantages of Credit Card Settlement
Some advantages to debt settlement include:
- It is quick.
- You can wipe out your debt.
- Your final bill is much cheaper.
- You can get back on track with bills and other expenses once your debt is eliminated.
There are advantages and disadvantages of everything, including getting rid of your debt. Disadvantages include:
- There may be fees involved such as with a settlement agency.
- It goes on your record and may be hard to get another credit card.
- You may be taxed on wiping out your debt.
- It negatively effects your credit.