The 3 Most Important Tips To Solve Credit Card Debt

1) Resolve to take care of your debts by yourself

It is so important that you face your debts, and do it yourself. I learned the hard way and wasted a lot of money and time by contracting with a debt settlement company. I was scared, and did not know what to do, and I had a lot of credit card debt, approximately $41,000. I contacting “Credit Counseling” first, and found this route to be worthless. Credit counseling does not lower your balance; it may take off interest and penalties (something you can do yourself) but that is about all it does. After that I interviewed eight debt settlement companies, picked the one that seemed the most efficient, and signed up. In my case their fee was about $6500 to settle my debts over several years at approximately 50% of what I owned. Sounds like a good deal. They said they could do it. I paid them $514 a month into a special savings account they were to use to negotiate settlements with my creditors. During the first six months I settled three of my six accounts completely by myself. All three I settled for less than 50% of what I owed, and one I settled for only 30%. At this point I stopped paying the debt settlement company, realizing they had done nothing in six months except collect their fee. Unfortunately, I had already paid them about $2500.

You can negotiate your own debts by yourself. You do not need credit counseling, you do not need a debt settlement company, and you probably do not need or want a lawyer. By doing it yourself, you will save a huge amount of money, and get out of debt much sooner.

2) Contact your Creditors, but not immediately

The key to solving your credit card debts is facing up to your creditors, and not being afraid of them. Timing is important, and you want to get the absolute best payoff option they are willing to offer. You haven’t paid your credit cards for two or three months now, and they are beginning to call you and send you letters stating you are behind in your payments. This is when you start contacting them. This is what I call the “information gathering step”. You need to explain that you are aware you are behind in your payments, explain your financial situation, and tell them you want to settle with them but you currently do not have the financial means to do so. This is not the time to settle with them, unless they make an offer which is just too good. Most likely, however, it is too soon in the process for them to make such an offer. Ask them what options are available at this time. You are feeling them out, determining if they are going to be easy or difficult to work with.

The fact that you called and explained your situation is noted by them, and as more time goes by and they are not receiving any payments from you, they will begin to offer programs without interest and penalties, and at greatly reduced payoff amounts. This is the time that you want to respond to these offers and negotiate the best payoff plan you can. They are offering you a payment plan because they realize it is better to get something than nothing, and is much more cost effective for them than going to court. They know that taking you to trial is costly, and could force you into bankruptcy. If that happened, they would get nothing.

3) Stay in contact with your creditors

Even if you cannot pay all of your credit cards, due to lack of funds, stay in contact with them. Call them once a month, tell them you are doing what you can, and explain that as soon as you are able you will begin working on your debt. The one thing you do not want to happen is to be sued. That is why it is so imperative that you stay in contact with them. They must know that you are sincere about taking care of the debt when you are able. If you ignore them they will take drastic action against you.

Remember, creditors want their money. And they would rather work directly with you. They do not like to work with debt settlement companies, and many refuse to do so. Be wise and work with them, and you will find that most will to work with you. Some are more open to negotiation than others, and it’s your job to determine which one’s to work with first.

If you follow these tips you will get out of debt much, much sooner, and save a bundle of money. Once you settle your debts you will have a tremendous sense of mental and emotional relief.

By: Mike A C

Article Directory: http://www.articledashboard.com

Click here www.mikesbooklist.com for instant access to free tips and opttions to solve your credit card debt quickly and for good.