How To Settle Your Credit Card Debts

By Author: Adam Ibrahim
Total Articles: 59
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Merchants are at ease when they allow credit card payments as the headache of collecting the payment from the customer lies with the card provider or issuing company. In most cases, credit card companies do not compromise for settlements, and often demand full payment of the money the customer owes. It is best to opt for credit debt consolidation rather than opting for a settlement to avoid going down on your credit ratings and other complications that might arise in the future.

Going for Debt Consolidation

The best way to go for a credit debt consolidation is to approach a company skilled in negotiating with your credit card providers. More often than not, such companies buy your debts to consolidate it into one single loan that requires one payment in whole. The interest rate is decided by the company, and in most cases, cannot be negotiated. In addition, such companies charge a fee for negotiations. This is recommended only for those who possess huge credit card balances. With many lenders in the market, it takes a little time to find a reputable and reliable lender. Be wary of dodgy money lenders who are just ...
... waiting to take advantage of your financial distress. Such companies might lure you into their tricks by offering instant money and charging you huge initial and hidden fees.

Balance Transfer

There is no harm in asking your credit card provider about their consolidation options. As they are generally experts in credit risk management, it is easy to convince them into buying a loan to consolidate your credit debts. In some cases, you can demand the transfer of credit card balances to pay off the existing debts. This is a safe option for those who are ready to pay off the entire outstanding amount in a certain period of time, say 12 months. Some companies offer an extension of this period and give up to 18 months of interest free payment period. You can use a credit card payment calculator to calculate the total available balance in your cards. The option is best for those who can avail a new card or have an unused card. In the event of failed payments or if you are unable to pay off the amount on time; you are most likely to be at risk as the company can charge you for the late payments and place high interest rates on your outstanding loan.

Home Equity

The safer option to pay off the credit card debts is to apply for a new personal loan that can cover up all the outstanding balance of your cards that can be calculated using a credit card payment calculator. If this is not possible, consider opting for a home equity loan. This is possible only for those who are mortgage holders on their homes. The equity available on your home can be used to pay off the debts, and lenders generally offer a considerable lower rate of interest on such loans. This is due to the fact that the loan offered is a secured loan. As you are offering a security on the loan, it is best to negotiate with them to avail the best deal possible.

Author’s Bio:

Author is an experienced content writer with many years of experience in the filed of finance. He has been appreciated for his many articles published online. Now he is providing information on credit debt consolidation and credit card payment calculator.