subject: Credit Card Debt Settlement Rates Have Crossed 30% - Should I Opt For Settlement? [print this page] Critics of debt settlement companies often point out that this debt relief option is marketed as the ultimate remedy for each and every financial problem today. There's some merit in this criticism. Settlement has many advantages. However, it is foolish to presume that this option can solve each and every financial problem.
There are some individuals who found to their horror and disbelief that interest rates on their cards had crossed thirty percent. They immediately start contemplating settlement to get rid of their debts. They find it difficult to digest that they are being asked to pay such high interest rates.
The first thing that you should ask yourself is whether you have been late in making repayments. Interest rates do not quadruple overnight unless you have missed repayments. The above mentioned rate is a penal interest rate designed to punish you for not making repayments on time. If you missed repayment by oversight, you can get in touch with your card issuer and promise prompt payments.
On the other hand, if you have missed repayments because you are not in a position to repay debts or because you do not earn enough, you should think of settlement. However, this option should be exercised only after considering a few more options and asking a few more questions.
The first is whether the problem that caused you to skip repayment is a temporary one. If it is a long term issue like loss of job or reduction in wages, then you are in deep trouble and should take action accordingly. On the other hand, if you skipped repayments just because another r financial emergency cropped up and forced you to divert all cash, then you can solve your problem without a settlement. If you can easily bring your repayments back on track in the month or two, there is no need to opt for settlement.
Further, you should consider whether you have a good credit score or not. If yes, then you can opt for consolidation loan to reduce interest payments and manage debts better. If your credit score is hit hard, then it is time to opt for a settlement.
If you are over $10,000 in unsecured debt it would be wise to utilize a debt relief network instead of going directly to a debt settlement company. Using a debt relief network guarantees that the debt settlement company you choose has been certified and has established success in negotiating settlements. They are free to use and a good starting point to begin your debt relief process.
