Finance, Loan, Debt and Credit.

March 11, 2018

What Credit Card Debt Settlement Companies Don’t Tell You

Enrolling in a credit card debt settlement plan is a turning point. In most cases, enrollment begins a period of financial recovery and new prosperity.

Participants should reduce credit card minimum payments and slash total finance charges through debt consolidation. The allure of these benefits entices many people to hire a settlement company before adequately evaluating offers. In particular, pay attention to a few common issues that companies may not mention.

Natalia Osorio Editor of the “Credit Card Debt Counseling” website — — pointed out;

“…Consolidation companies charge fees. These fees typically include a monthly maintenance fee to cover administrative costs. In addition, most companies also charge a setup fee to establish a plan. Monthly fees may range from $25 up to $60. The setup fee is frequently equivalent to regular plan payments. For example, if a plan requires a monthly payment of $500 over two years, setup fees of $500 are common. Plans may incorporate a delay of one month before plan payments are required, so that the first payment can be applied towards the setup fee…”

Plan fees increase the cost of repaying credit card accounts. The best companies insure that fees are reasonable and that discounts achieved through settlements justify all fees charged. Few companies reveal the percentage of fees charged in relation to total payments. This percentage is easily calculated by dividing total fees by total plan payments. In one sense, fees are the cost of obtaining discounts through a professional negotiating service.

Settling debts results in repayment of less than the original principal amount owed. Settlements are voluntary, yet lenders nevertheless frequently report settlements to credit reporting agencies. Most often, credit reports include a statement that an account was compromised by agreement. Future lenders interpret this reference as a charged off loan.

Anyone can negotiate payment reductions directly with a lender. The results of negotiating personal accounts are mixed. A degree of expertise is required to motivate lenders who may not trust an account-holder’s personal explanation of financial difficulties. Alternatively, professional negotiators develop relationships with credit card companies over time. In most situations, professional negotiators produce better settlements. Nevertheless, each account-holder may avoid fees and potentially receive the same benefits.

“…Free estimates for costs and benefits are not guaranteed. The final amount of the plan payment is determined through negotiation of individual accounts. A few lenders may demand a higher percentage or principal owed. A few lenders may accept a lower percentage. Estimates are based on experience negotiating agreements with each lender in the past. As a result, the actual plan payments required is seldom equal to the original estimate…” N. Osorio added.

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May 30, 2013

Credit Card Debt Settlement Exposed – What A Debt Settlement Company Should Tell You

Credit card debt is a plague that many people have fallen into. Most are able to make their monthly minimum payments, but are unable to effectively pay off their debt in a matter of years. Because of this, many companies are new capitalizing on debt solutions.

These companies promise to get you out of debt fast and with as little money owed as possible. For some companies, this is true and they are legitimate. For other companies, this not true and they are scammers. Here are some of the things that good companies will tell you when you contact them.

Aurora Lillo Editor of the “Credit Card Debt Settlement” website — — pointed out;

“…A great debt settlement corporation will begin by telling you what their credentials are. They should always tell you how they are affiliated with educational requirements or their affiliation with certain credit card lenders. If a settlement organization will not offer you their credentials, hang the phone up immediately. Legitimate settlement groups will be able to tell you their training and qualifications and ask you if you would like any proof. If they offer it you, they are probably not a scam…”

Another thing that these groups should be able to tell you is exactly how much you are going to need to be out of debt. For instance, if you owe five thousand dollars to a credit card lender and your settlement agents tell you that you need twenty five hundred to settle right then, they are definitely legitimate. Your counselors should always be a step ahead of you. If you have a question that they can’t answer within thirty minutes, go on to another group.

If your settlement agency sets you up with a payment plan, there are two things they should be able to tell you. They should be able to give you a specific interest rate that you are going to be paying and they should be able to give you a specific time frame for the month that you will be debt free. If they can’t give you either of these then they are just looking to make money.

“…Be sure to choose a settlement group that is going to represent you to the fullest with your creditor. Don’t go with one that has no credentials or can’t give you a specific time frame to when you’re going to be out of debt. Always check user reviews and online forums before you ever sign with anybody…” added A. Lillo.

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