Credit card relief programs, including credit card settlement, validation, and consumer credit counseling, are all becoming more and more popular.
If you’re interested in joining a credit card debt settlement program, you’re in the right spot! Before we talk about how these programs work, we will first explain what credit card settlement means.
Are you wanting to learn how to negotiate with the credit card company on your own? You’d be better off reading – “10 Best Ways to Clear Credit Card Debt” (inside this guide you’ll get step-by-step instructions on how to negotiate with creditors).
What is credit card debt settlement?
- Credit card debt settlement is when you settle a credit card debt for less than the full balance owed.
- Debt settlement helps a person who can’t afford to pay their credit card balance in full, by lowering the total amount owed to something that’s more affordable.
- The creditors agree to reduce a person’s balance because they realize if they don’t accept the reduced amount, they may not get paid anything.
- If a creditor rejects a settlement offer, they realize bankruptcy may be the only other option for a person to consider. Neither you or your creditor want you to file for bankruptcy. You don’t want your credit ruined for the next seven years, and your creditors would rather maximize their profits.
Why do collection agencies prefer to settle debt than allow you to file bankruptcy?
According to Paul Paquin, Golden Financial’s CEO:
“If a person stops paying their credit card payments on a monthly basis and makes the choice to fall behind on payments in order to use the credit card settlement strategy, here’s how the creditors react: After approximately 4-6 months the credit card company, “writes off the debt”. Credit card companies write off debt so that they can get reimbursed 100% of what’s owed, plus some! How do they get reimbursed? First, credit card companies resort to banking insurance. Second, credit card companies get reimbursed by showing a loss and through accounting methods (like a tax credit). Third, credit card companies sell the credit card account to a third-party collection agency (which is pure profit). After the debt collection company buys the debt, at that point the original creditor wipes their hands clean of the debt. Now the debt collector (that you never agreed to work with) is coming after you over this debt. Often these collection agencies don’t even have accurate and complete documentation that is required by federal laws to be legally collecting on the debt. Consequently, these collection agencies are willing to settle credit card debt for anywhere from 30%-80% of the original balance on an account. Collection agencies may only pay 20% of the balance when purchasing debt, so to settle that debt with the consumer at 40% is still a huge profit for them, but if you file for bankruptcy they may NOT get paid a dime!”
Do you qualify to have your credit card debt settled?
Find out by speaking with one of Golden Financial’s IAPDA Certified Counselors at (866) 376-9846. (FREE CONSULTATION)
What percentage will credit cards settle for?
In the example above, the credit card debt was settled for less than 40% of the balance, but this is not guaranteed to always be the case. The same credit card company may settle an account at 40% one day, and then 70% the next day. Additionally, debt relief program fees get added in, on top of the settlement amount.
How much can I save in total with credit card settlement programs?
Clients end up paying about 70% of their total debt, saving 30% in total when using a credit card settlement program.
Is your goal to use the least expensive program to resolve delinquent credit bills?
Consumers can end saving more money by using a debt validation program, and validation includes many additional benefits. After an account is invalidated, it no longer needs to get paid. There are no tax consequences on an invalidated debt and the account can no longer legally remain on a person’s credit report.
If you’re contemplating using a debt relief program contact one of our IAPDA certified counselors today. You can get a free consultation and choose from multiple options to help you resolve your bills. Call (866) 376-9846.
Summary of how a credit card debt settlement program works
- Credit card debt settlement programs take the stress away from you. The debt settlement company takes over dealing with your creditors.
- You only need to make one low and affordable monthly payment.
- You will get notified when it’s time to settle one of your debts.
- The negotiator will give you the good news and go over the details of the settlement offer.
- If you accept the offer the creditor will instantly get paid the reduced amount.
- Your account will get reported, “paid in full”.
- One by one each of your credit card bills will get reduced, settled and paid.
- Within around three years (average) you’ll become debt-free.
Take action today and find out how much you can save with credit card debt settlement services at 866-376-9846.
How does a credit card settlement affect your credit score?
Debt settlement only works if your delinquent on payments to the point where your accounts have been sold to a debt collection company. Since that’s the case, don’t expect your credit score to improve after joining the program. Settling your credit cards for less than the full amount could result in late marks and collection accounts on your credit.
Your credit score will be negatively affected by a debt settlement program. Settling credit card debt is a method used to eliminate debt fast and save a person from bankruptcy, and is not designed to improve your credit score.
After you become debt-free, you can then focus on re-establishing credit and building your credit score back up. If you are current on your credit card monthly payments and have a high credit score, learn about these credit card relief programs here, before joining a debt settlement plan.
How long does credit card debt settlement stay on your credit report?
The late and collection marks can stay on your credit report for up to 7 years. The negative marks have less influence on your credit score as time passes, year after year. So the key is to establish new positive credit and start paying your bills on time every month, as the adverse effect from your past debts gradually continues to diminish. Your credit score will begin to improve after debt settlement.
Here’s the equation:
Settle your balances as fast as you can (in this phase, your score may go down in the beginning, but as your debts are “paid off”, one by one, your “debt to income ratio” DTI will improve) + re-establish new credit and start paying your new bills on time every month (use and pay every month) = credit score and credit limits will start to increase and improve
How to Find the Right Credit Card Settlement Company
- Check the Better Business Bureau (BBB) at BBB.org. Debt settlement companies that have a high BBB rating and no customer complaints are where you want to be. Golden Financial Services is A+ rated by the Better Business Bureau and has no customer complaints.
- Check for online reviews. Check Google, Yelp, and whatever other review sites pop up when you Google the company’s name and complaints next to your query. Just Google (“Debt Settlement Company Name” Complaints). Just make sure not to look at reviews on the company’s website.
- Time in business: Make sure the company has at least 5-10 years in business. Check sources such as their state’s Secretary of State website, which will show how long they were incorporated for.
Who qualifies for a Credit Card Debt Settlement Program?
- Are your credit card payments too high?
- Are you finding it hard to stay current on your bills?
- Have you fallen behind on your payments?
- Do you have a hardship including divorce, reduced income, loss of a job, or a medical condition?
- Has your minimum payments or interest rates increased?
- Did you perhaps spend too much money and now your unsecured debt payments are just spiraling out of control?
- Did you spend money on your cards to pay for your business, home fixtures or to help a family member?
If you answered yes to any of these questions then you could be a good candidate for this hardship program. There are many other reasons that could qualify you for the program, but the ones mentioned above seem to be the most common.
Take action today and find out how much you can save with credit card debt settlement services at 866-376-9846.
The Credit Card Debt Settlement Process Starts Here
- You can start off with a free consultation from one of our IAPDA Certified Professionals. They will go over debt settlement and all of your debt relief options to make sure you pick the best plan for your specific needs.
- We present all of your options to you, and you then pick the plan that you like best. You can pick from multiple monthly payment options and savings plans. You will get a free savings estimate for each plan.
- You can get a free credit report and score during your consultation.
- After you select the plan that you want to use, the credit card settlement experts then come into the picture. Your creditors will be notified that you are on the plan and to start contacting your negotiators instead of calling you.
- You will then be provided with a welcoming aboard phone call where the next steps will be provided. At that point, everything is pretty simple for the client. You only have to make your one low monthly payment and send in any letters that you receive from your creditors and the credit reporting agencies. You’re dealing with one of the best debt relief companies in the nation, so expect nothing less than the top of the line service!
Why is Golden Financial Services one of the best companies to work with?
Golden Financial Services is one of the few debt settlement BBB highly rated companies and has been since 2004. A service that works must be provided to consumers to maintain a good BBB rating. The BBB checks on a regular basis ensuring that a debt relief company has zero unresolved customer complaints, client testimonials, graduated clients, is compliant with the Federal Trade Commission, has compliant marketing and the BBB checks these factors on a regular basis.
Here are examples of real creditor settlement letters that clients have received on the debt negotiation program with Golden Financial Services.
Golden Financial Services achieves outstanding settlements with the creditors because we have a massive number of client’s debts to use as leverage. When negotiating we bulk together a large number of clients’ credit card debts with a particular creditor, then basing negotiations on a significant dollar amount, where we have more leverage and can solidify more substantial discounts for our clients.
There are other programs including debt management, tax resolution, and credit restoration that consumers may qualify on. We will go over all options with you. If you qualify for debt management, we can refer you to our nonprofit consumer credit counseling partner. If you qualify for a credit settlement, we can assist you!