Credit card debt in the United States is at an all-time high, and delinquency rates on instalment loans, revolving credit and mortgages have experienced double digit increases, as well. Most mortgages and instalment loans don't have their interest rates go up when the payments are late. Not true for credit card debt.
Many credit card companies will raise the interest rate on a cardholder's account after just one late payment. In most cases, this will happen even if the payment is only one day late. Many people think that this practise is the legal equivalent of loan sharking, and it has hurt the finances of thousands of people. People who were just getting by before can't seem to make enough money to pay their bills each month. Many people are at a crossroads and must now decide which way to go to pay off their credit card debt.
If you find yourself in a similar situation and are having trouble with money but don't want to go bankrupt, you might want to talk to your creditors about lowering your pay-off balance (usually by 50 percent or more). Don't, however, think that you can just make a phone call and agree on a settlement amount. That's not how debt settlement works.
In fact, if you contact your creditor and ask for help in any way (debt settlement, interest rate reduction, etc.), they'll probably tell you in a nice way, "We can't help you, but if you pay on time for the next six months, we'll look at your account and see if we can lower your interest rate."
What should you do then? Be patient and take the time to learn as much as you can about how to settle your debts. There are a lot of resources that can help you get through the debt settlement process. If you find that negotiating with your creditors to get lower settlements on your bills is more work than you want to do, there are a number of good companies that would be happy to do it for you.
If you decide to hire a debt settlement company, it's important to make sure that the company you work with is focused on your financial success and has clear goals. Many firms work on a contingency basis, which means they won't charge you a fee until they've reached a satisfactory settlement with your creditor.
No matter what you do to get rid of your debt, you can take comfort in the fact that your financial worries will soon be a thing of the past. This means you probably won't have to worry about money as much and won't lose sleep over it. Even if you don't believe it, you'll feel relief and a very welcome sense of "calm" again.
