Credit card debt settlement is quickly gaining popularity, especially in this economy. Everyone is trying to save money in every possible way. This desire to save money even extends to paying down debt. If you can haggle with credit card companies yourself instead of hiring credit card debt settlement companies, then you can use that extra money each month to pay down your debt that much faster. If this sounds like something that would interest you, then it’s best to start with the basics.

Be Prepared

The degree to which you are prepared when you call your creditor can mean the difference between success and failure. When you call, you must have the following items handy: a copy of the most recent bill, the credit card debt settlement letter, and a defined amount that you are confident you can pay in the event that a settlement is reached with the creditor. This amount can be a lump sum or monthly figure.

Make the Credit Card Settlement Call

Now it’s time to actually make that dreaded call. If your account is past due 6 months or more, then you should not expect the collections department to be all smiles and rainbows. There is a good chance that they will be angry and hostile. You have to understand that collectors are trained to go for the jugular and get the payment from you. Sometimes you will be lucky enough to contact a collector that is used to offering settlement agreements, but you might be stuck with a collector that will not be willing to budge. The best way to start the call is by making it clear that you want to make a payment or that you would like to reach a credit card debt negotiation settlement agreement.

Don’t Give Up If You Encounter Trouble

If you hit a wall talking to a collector that will not compromise, then you have some options. Your first option is to simply end the call. Since almost all calls are recorded you will want to be as respectful as possible and definitely avoid any and all profanity, it will come back to haunt you later. Your next option would be to ask to speak with a manager. Managers are much more likely to agree to payment agreements, but only if they are reasonable. Your last option is to create your own credit card debt settlement program and then express this program in a written letter to the president of the company or to a manager. It may be smart to consult a debt settlement attorney to help you with this process. You will want to have a detailed plan outlining how you intend to repay what you owe. Make sure you have exact payment amounts as well as dates. The more specific you are the more they will take your credit card debt settlement plan seriously.

The Ultimate Goal

The ultimate goal of your efforts is to get your debt down to a level that you can realistically manage. You will also want to get over the limit fees, finance charges, and late fees wiped off your account because these will make it nearly impossible to pay off your debt. These charges can typically amount to a staggering 30 to 40% of your total debt. If your creditor is not willing to make a settlement with you that satisfies your needs, it is best to walk away and give them time to think. They will most likely send you a credit card debt settlement letter in a few weeks time. While waiting for this letter can be aggravating, if it saves you thousands of dollars then it is well worth the wait.

Top 4 Credit Card Debt Settlement Mistakes

There are a few different things you can do to totally ruin your chances at a credit card debt settlement. You will want to avoid these like the plague so that all your hard work, and your hopes of paying off your debt, does not go down the drain.

• You should never get into a petty argument with a creditor. If you resort to using foul language because you get caught up with anger then you can pretty much kiss your chances of success goodbye.

• Never write the term “paid in full” on a check that you send to your creditor. Many people think that if a creditor cashes the check with this phrase written on it then the debt is considered settled, this is simply not true.

• A credit card settlement agreement would fall under the Statute of Frauds and therefore must be written to be valid, an oral agreement will not be sufficient. Make sure you get a letter from your creditor that clearly states the amount of the settlement.

• Don’t let collectors intimidate you. You need to know your rights as a consumer. For information on your rights, you can review the Debt Collection Practices Act, which can be found by visiting the Federal Trade Commission’s website.

How to Write a Credit Card Settlement Letter

You would write the credit card debt settlement letter using the same tactics as calling your creditor. You would prepare with the exact same materials as you did when you were getting ready to make the call.

Once you are ready to pay the settlement you will have to get prepared to send it in. But what is the best way to send a credit card settlement? Well, before you send anything you must make sure you have something in writing saying that the settlement that you are sending is going to clear your debt. When you send the settlement make sure you use registered mail. Also, make sure any correspondence with the creditor has the company’s official letterhead on it.

Final Thoughts

Credit card debt settlement can be a daunting task, especially if you decide to do it yourself. By using the methods that are presented in this article, you will have the greatest chance of success with your efforts to battle the credit card companies. Good luck!