How to Settle Credit Card Debt Without a Debt Settlement Company
Smart Money

How to Settle Credit Card Debt Without a Debt Settlement Company

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Consumers can save a significant amount of money by attempting to settle their credit card debt without the involvement of a debt settlement company. Not only do borrowers spare themselves the costs of the company’s services, but they will also avoid the possibility of having to repay the settlement company if they use their funds to settle the account, in effect making them a new creditor to which the borrower is beholden.

In order to independently arrange a settlement with their creditors, however, card holders must know how to negotiate with the banks and how to present themselves during the process. Below is a list of things the borrower can do to improve their chances of reaching a settlement.

  • Credit card holders should keep all relevant paperwork in front of them when they contact their lender. This includes their most recent bill along with a copy of past due notices. If the bank has offered a settlement, the settlement notice should be included, as it will undoubtedly be referred to during the conversation.
  • The borrower will also be better off if they come up with an amount for which they are willing to settle. This can include both a lump sum settlement as well as reduced monthly settlements. The rationale behind these amounts should be at the user’s ready, however, in case the bank requests to know how the borrower arrived at the figures.
  • The length of time the account has been overdue will determine the openness of a bank’s collection department toward a settlement. If the account has been in default for several months, the borrower should expect to fight long and hard to reach an agreement. If it has only been a month or two, the bank will be friendlier toward the suggestion of a settlement, even if they do not agree to it in the end. Regardless of how the bank reacts, the card user must stand firm.
  • When speaking with a collections representative, who refuses to entertain a settlement, borrowers must take great pains not to get frustrated or let their annoyance show. Instead, they are better off asking to speak to the representative’s supervisor. If the representative refuses to transfer the call, the borrower may have no option other than to end the call, making sure to be courteous as they do so.
  • It can improve the odds of successfully reaching a settlement if the borrower pushes for the removal of fees and penalties from the account, rather than a reduction or halving of the actual principal. Most often, the amount remaining after late fees, annual fees, overdraft fees, transaction fees, etc., is more manageable. This should always be the goal; never to eliminate the debt completely.
Founder - Roland B Bleyer

Roland Bleyer

Founder of Roland has extensive knowledge about credit cards in Australia. Known as a credit card expert, he has been featured on tv and in various publications. Some popular offers on our site right now include the ANZ Low Rate. Ever popular with no annual fee first year, low purchase rate and 0% balance transfer. Have a look also at the 0% balance transfer HSBC offer with no balance transfer fee, plus an annual fee waiver each year you meet a spend criteria.

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