Can’t Make Your Credit Card Payments – What’s Next?

Are you worried about the future likelihood of not being able to pay your credit card debt?

Are you already behind in your monthly credit card payments?  Have you interest rates and monthly minimum payments been increased?  Have you suffered late payment penalty fees?

Has bankruptcy to eliminate credit card debt crossed your mind?

Unemployment, a devastating health problem, a family death, an unsuccessful business, or something else could have ruined your finances.  Regardless of the cause of your credit card debt troubles, you can avoid the distress and negative thinking about bankruptcy or predatory creditors with some basic knowledge of unsecured credit card debt.

Learning the truth about credit card debt collection is the key to peace of mind for consumers with late credit card debt, and it is the way to eliminate credit card debt, according to the Credit Card Debt Survival Guide. Eight percent of American adults (That’s 18 million people.) missed a credit card payment in the last 12 months, according to creditcards.com.  If your account is in arrears, it is one of millions. Your delinquent account can be one of thousands, tens of thousands or hundreds of thousands of credit card accounts sold in a package of junk debt for ten cents on the dollar or less to a junk debt buyer.

The credit card companies must budget for bad debt per Federal Reserve regulations.  Their planning assumes a certain percentage of consumers will not pay their credit card debt.  Then, the credit card debt collectors who end up with those debts assume there are two kinds of consumers; those who do not resist their collection efforts or do so ineffectually and those few who do resist to eliminate their credit card debt.

Your safety and security are in the numbers, in the millions of charged-off accounts and in the pennies per dollar each is actually worth. If you resist debt collection attempts (after you learn how to properly do so), it is simply not profitable for a debt collector to put more time into chasing you, when they can put that time in getting the easy returns from the many other people who put up no resistance.  Credit card debt collectors can make a lot of money, if they only collect from 50 percent of the delinquent accounts assigned to them.

An understanding of the Fair Debt Collection Practices Act, your state’s consumer protection laws and, if needed, your local court’s rules of civil procedure will make it possible to turn away debt collectors and eliminate credit card debt.

Credit Card Debt Settlement

Here аrе three common qυеѕtіοnѕ аbουt credit card debt settlement, аnd three grеаt аnѕwеrѕ tο hеlр уου wіth уουr debt problems

Arе thеrе legal secrets tο settling credit card debt?
Contrary tο debt settlement firms advertising secret debt settlement options thаt credit card companies dο nοt want уου tο know, thеrе аrе nο secrets tο eliminating credit card debt bу legally settling іt.

A credit card account іѕ a contract between two parties.  Thаt contract саn bе changed іf thеrе іѕ аn agreement between thе consumer аnd thе credit card bank.  In thіѕ context, thе mοѕt іmрοrtаnt раrt οf Legal Opinion іѕ fοr thе consumer tο gеt thе negotiated debt reduction аnd thе terms іn writing, according tο thе Credit Card Debt Survival Guide.

Cаn уου settle уουr credit card debt without being late wіth payments?
Thе short аnѕwеr іѕ NO.  Banks won’t settle wіth consumers whο аrе nοt late іn thеіr payments.  If thеу dіd, thеу wουld open up thе floodgates tο еνеrу credit card account holder seeking credit card debt relief.

Aѕ far аѕ credit card accounts gο, consumers fall іn tο two categories; those whο саn pay thе monthly minimum, аnd those whο саnnοt.   Fοr those whο саn pay аnd whο want tο settle fοr less thаn thеіr full balance, thеу mυѕt risk nοt mаkіng thеіr monthly payments аnd thеn banking thаt money fοr аn eventual lump sum settlement.

Hοw much οf a balance reduction dο credit card companies οftеn settle fοr?
Online consumer forums hаνе ѕtοrіеѕ οf consumers settling fοr аѕ lіttlе аѕ 20 аnd аѕ much аѕ 70 percent οf thеіr credit card account’s original balance. According tο credit card debt settlement expert Charles Phelan, consumers whο settle οn thеіr οwn gеt thе best settlements.  Phelan аlѕο ѕауѕ credit card companies wουld rаthеr deal directly wіth a consumer, rаthеr thаn gο through a debt settlement firm.

Whеn approaching a bank fοr a debt settlement, a consumer mυѕt present a convincing case wіth low income, dаmаgеd credit аnd legitimate hardship issues.   According tο thе Credit Card Debt Survival Guide, credit banks аrе mostly lіkеlу tο settle fοr thе lowest amount οf money аnd mау offer tο settle rіght before thе account charges οff, whісh іѕ usually around six months οf arrears.

3 Hot Tips to Negotiate Your Credit Card Debt

If you’re reading this, chances are your monthly credit card bills are putting a serious dent in you and your family’s lifestyle. Even if you’re making the minimum payments (something that I don’t recommend, by the way), and you find that there’s way more month than money, you still may have a few tricks up your sleeve to help your situation.

By help, I mean you’ve got legal and ethical options to lower your debt amount, lower your monthly payments, or both! Plus, you can help yourself and keep a good credit rating (or even improve it) when you negotiate credit card debt!

1. Find a credit card with a lower interest rate on the balance you hold. One of the oldest tricks in the book – and still very effective. An easy, no-sweat way to save literally thousands of dollars every year. If your income and credit ratings are still good, start your research now into cards with low rates. Sometimes, credit cards will have a “teaser” or introductory interest rate that can be absurdly low – but only for 3 – 6 months. Then it ratchets up, maybe even higher than you’ve got now. It’s worth the trouble, but you have to have another low-rate card lined up when the current low rate expires. Then you repeat the whole game over again – would you do this a couple of times a year to save thousands? I would.

2. Negotiate your credit card debt with your current credit card companies. This is another very effective way to save thousands each year – and surprisingly few people take advantage of this option (or even know it’s available). It works like this – simply find a new credit card with a rate much less than you’re paying now. Call customer service at your present credit card company (or companies), the phone number is on the back of the card. Tell the CS representative that you have found a much cheaper card, and that you’re considering moving your balance. Then, ask if they could match the new rate – and you wouldn’t move away if they can help you. If they can do it – great, most times you’ll get a positive answer. If not, see #1 (above).

3. Take out a personal loan at your local bank or credit union. If your credit is still ok, and you still have a job, then this could be a great option for you. Use a personal, unsecured loan to pay off those high interest credit cards and, once again, save thousands a year. Of course, the interest rate on the personal loan will be high, but probably quite a bit lower that the rate(s) on your credit cards.

These are only 3 of the many ways you can save money by negotiating your credit card debt. One thing that you really need to do is change the lifestyle and choices that got you into trouble in the first place. Get rid of most of your credit cards. Live on only the money you bring in each month. And, make extra payments on your debt – so you won’t be paying interest all your life!

Valuable Tips to Relieve Credit Card Debt

Depending on how you use them, credit cards can be a great resource, or a real curse. Use them cautiously, pay the balance in full each month, and credit cards can be an enormous convenience. Use your credit cards recklessly, build ever-increasing amounts of high-interest credit card debt over time, and credit cards can ruin your life.

If you, as many others today, find that your credit card debt is eating you out of house and home, rest assured that you can reverse the vicious cycle and regain control of this debt monster. How? The answer may surprise you with its simplicity – you must eliminate your credit card debt.

Here are some proven ideas and techniques to help put you on the path to financial health. The journey may not be easy, but the destination (debt free) is grand!

• Get rid of most of your credit cards. The first step in getting yourself out of your debt hole is to stop digging. Tear up or destroy department charge cards, gasoline cards, and any other non-major credit cards. Now, take a look at the remaining cards. All you should have left are cards with names like Mastercard, Visa, Discover, American Express, etc. Cut up and cancel all but one of them. How to decide? Keep the one with the lowest (or no) annual fee. Make sure you have some credit limit on this card and are not behind on payments – you’ll need this one for emergencies. You’ll still have to pay the balances on these cards, but you’ll not be adding to those balances.

• Move credit card balances from high interest cards to lower interest cards. Related to the above, read the fine print on all of your statements and see if you can move some balances from high to low rates. Make sure there is no fee associated anywhere to do this. And, make sure that the one card you intend to keep has some room for purchases.

• Use the remaining credit card for emergency purchases only. Some debt experts will tell you to pay cash (checks or debit card) for all your expenses now. I would change that a little – if you can hold a budget and can be a responsible shopper, use this credit card for your core purchases. Food, auto expenses, etc. But, spend only what you can pay off in a month. If you absolutely cannot be responsible, then cash is king, as you must not raise your credit card debt level.

• Put together a budget for monthly expenses. It’s surprising how many people have no idea what their money is spent on each month. If you fall into this category, take the next 30 days and keep detailed records (and all receipts) of everything you spent money on. And, that means every pack of gum, every Starbucks and every subway fare you buy. Everything. Then, and only then will you be able to put yourself (including your family, if applicable) on a monthly budget. In case you’re a little fuzzy as to where this is going – the idea is to be able to cut expenses where possible, so that you can make extra payments on your credit card debt. You may be shocked when you find out where your money goes.

• Pay more than the minimum amounts due each month on all of the credit card balances that you can. If you’ve successfully designed a budget for household, that means you probably have a few extra bucks left over that can be applied to your debt. This is absolutely essential. Short of some very drastic measures (bankruptcy, debt negotiations, etc.) that could do some very real harm to your credit rating, paying down your debt is the best way to get control of your life. You may want to do a debt snowball, which means that you start paying down the debt with the highest interest rates first – this will save you the most money in the long run. Then, as each debt is paid off, move onto the next one. Depending on how deep you’ve dug your hole, this could be a years-long process. But, the rewards are great, and you will be left with a clean bill of financial health, and the satisfaction that you fixed the mess.

Unlike various companies and industries, people like you and I will NOT be getting any government bailout for our debts. You will have to take the challenge, grab all the shovels that you can find and start digging yourself out from credit card debt.