The secret behind credit card debt

Did you know that a single phone call could change your financial future? Millions of Americans struggle with credit card debt every year. As a result, they see their credit card company as the enemy and refuse to do anything but send off a check to pay the minimum amount required every month.

In reality, the credit card companies are not necessarily out to break you. Sure, they want to make money. But the truth is that credit card companies lose millions of dollars every year because of customers defaulting on their debt. Therefore, they are often willing to negotiate with you if you are struggling to pay off your debt. All you need to do is communicate with them and understand how to get your debt reduced dramatically.

How to negotiate a lump sum payoff

There are many ways to negotiate a lump sum payoff with your credit card company. Here are a few of the steps you’re going to want to take in order to start the negotiation process and see it through:

Pick up the phone and call your creditor: Not all credit card companies will be willing to negotiate with you. They usually use negotiation as an option when a person seems to be close to defaulting or struggling to make minimum payments every month. Regardless, see if they would be willing to negotiate.

Send your creditor a letter: If they are willing to negotiate, you’ll typically need to create a letter that states your intentions on settling your debt. Debt settlement occurs when you and your creditor find a lump sum payoff that you can pay immediately in order to eliminate your entire debt. This payoff is usually significantly lower than your overall debt. Your letter should spell out your desire to negotiate and settle and also include a payoff that you feel is fair for both sides.

Pay off your debt: Your creditor will either accept or deny your payoff offer. If they deny it, you will need to negotiate further. If they accept it, pay off your debt immediately for just a fraction of the price and be done with it forever.

Drafting a proper debt negotiation letter

Once you call your creditor and ask to negotiate your debt, you’ll likely need to draft a debt negotiation letter. This clip explains what you’ll need to include.

Deciding whether to call an attorney or credit counselor

As you move through the debt settlement process, you will likely find that it can be slightly intimidating at times. As America struggles through a recession, many creditors are actually more than willing to at least talk about negotiating debt. But an attorney is still probably the best way to ensure that they listen to you. At the worst, they may not be willing to slash your debt dramatically. But an attorney or credit counselor can use connections they already have to start negotiating. Just be sure you choose a reliable and trusted name should you choose to call an attorney or counselor.

How a debt counselor can help

Many people have differing opinions on debt counselors. However, the truth is they can be helpful through the debt negotiation process. Watch this short video to hear what they can do for you.

How to stop others from hurting your credit

In some cases, the debt you have is not entirely your own. You may have accumulated debt as the result of some fraudulent activity or someone close to you may have driven up the balance of your debt over time. Here are some ways to handle these situations:

If fraud is at the heart of your troubles, contact an attorney immediately and also alert your creditor to the fraudulent activity. They will deactivate your credit to avoid future abuse. You will likely need to prove that the purchases made using your credit were not you. Come prepared to talk out the problem. Fraud has become a huge problem in America over the last decade so many credit card companies have seen and heard the worst of it. Be truthful and forthright with your information and you should not have a problem clearing your good name.

If a family member is at the heart of the problem, you may have some trouble and you may ultimately need to decide whether or not to press charges against that person in order to help clear your name. Should you choose not to, you will likely need to handle the debt accumulated yourself. However, it is important to speak with an attorney so that you know your options in the matter. Also, speak directly with your family member if you can to help rectify the matter.

If your spouse is having trouble controlling his or her spending habits and is hurting you in the process, you need to take action. Sit down and talk to them about the problem calmly and see what they have to say. They may have a real problem that needs professional help, or they may just need help budgeting their money. Either way, you need to take a proactive approach in controlling their purchases in order to maintain good credit.

Getting in touch with a credit counselor in your area

A credit counselor is a great source for anyone looking to get answers about credit, debt, spending, budgets and money management. Here is a list of credit counseling services across America. Find one near you and start learning more about your credit today.

NY Credit Advisors
New York, NY
347-448-4100

Financial Counseling Center
Los Angeles, CA
323-954-4330

Cornerstone Financial Counselors
Miami, FL
305-271-5094

Consumer Credit Counseling Service of Greater Dallas Inc.
Dallas, TX
972-387-2227

Harbour Credit Counseling Services
Virginia Beach,VA
757-340-2564

Skrupa Law Office
Omaha, NE
402-571-2900

Kansas City Credit Services Inc.
Kansas City, MO
816-421-8001

Action Credit Advisors
Houston, TX
281-495-7757

Integrity Credit Resolution
Wilmington, DE
302-479-5110

Southern Management Systems
Orlando, FL
407-648-0044

Clear Point Financial Solutions
Raleigh, NC
919-875-0900

Family Guidance Center: Consumer Credit Counseling
Trenton, NJ
609-882-1898