Is credit card lump sum settlement right for you?
When your credit card balances are out of control and you can’t see a way of paying them off, a credit card lump sum settlement may sound very appealing. But before you begin negotiating credit card settlement, it’s a good idea to have a clear understanding of the credit card settlement process and how it can affect your finances and credit rating.
What is credit card settlement? Credit card settlement is a form of debt settlement, where you try to get credit card companies to wipe out your debt by paying a credit card lump sum settlement that is less than the total of what you owe.
The downside of credit card lump sum settlement.
Many credit card settlement companies will advertise that they can help you settle credit card debt for a small fraction of your total debt, but a credit card lump sum settlement may be as high as 60% or 80% of your total debt – or your credit card company may not accept your credit card lump sum settlement offer at all.
There are several significant potential downsides of credit card lump sum settlement. Settling debt in this way inevitably affects your credit rating, and it may take years before you can apply for loans, buy a car, rent an apartment, or get a mortgage. Your credit card company may decide to take you to court instead, adding a pile of legal bills to your financial difficulties. And a credit card lump sum settlement program likely won’t address the habits and behavior that helped you get into debt in the first place.
Getting advice about credit card lump sum settlement.
So, is credit card lump sum settlement the right choice for you? Before you contract with a settlement company, it’s helpful to understand all your options for getting out of debt. That’s why so many consumers come to American Consumer Credit Counseling (ACCC) for credit counseling before making any decisions about settling debt.
ACCC is a not-for-profit organization that is dedicated to helping people like you take stock of their finances and find the best way out of debt. We offer free credit counseling where you can discuss with a professionally certified credit counselor who can help you better understand your situation and the different paths you can take to get out of debt. We can help you understand how to settle credit card debt most effectively, and how other forms of debt relief may be more advantageous.
Contact us today to schedule a free credit counseling session.