What are the effective steps to settle your credit card debts without an expert’s help?

April 11, 2013

Credit Cards, Debt Management

Credit card debts

Credit card debts

A large number of people in the US incurred overwhelming debt and complicated their financial situation. After the recent economic meltdown, most of the people defaulted on their credit card payments and incurred insurmountable amounts of debts. If you’re in a similar situation, then settle your debts on your own to eliminate your financial situation. However, if you’re unable to work with a financial expert, you can settle your debts on your own. So, you can follow the tips given below in order to settle your debts on your own.

Here are some of the essential steps you need to consider when you plan to settle your debts:

1. Budgeting- An effective tool: Budgeting is considered as an effective financial tool to keep tab on your financial situation. It can help you check your expenses and guide your to avoid splurging your hard earned money. When you’re on a budget plan, you can manage to save considerable amount of money. You can use the saved amount to pay off your debts on your own.

2. Calculate the total amount you owe: Make sure you calculate the total amount you owe to the creditors. You can effortlessly pay off your debts when you’re aware of the total amount you owe. It can be easier to eliminate your debts if you know the amount you have incurred.

3. Negotiation- Ideal way to settle your debts: Negotiation is considered to be an indispensable part of credit card debt settlement. You can negotiate with the creditors to lower the outstanding balance to make the owed amount affordable to pay off. Make sure you have genuine reasons why you defaulted on payments. You need to provide hardship letter in order to convince the creditors to lower the outstanding balance.

4. Ask to report the account as paid in full: When you settle your debts, you pay less than you actually owe to the creditors. Therefore, the creditors may report the account to the credit bureau as “settled” instead of “paid in full.” This statement on your credit report may blemish your credit report and your credit score may drop. As a result, you can request your creditors to report the account as “paid in full” instead of “settled.”

Therefore, you’re required to keep the above mentioned steps in mind when you plan to settle your debts on your own. Once you settle your debts, you can manage to pay off your debts with ease.

What are the effective steps to settle your credit card debts without an expert’s help?

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Budgeting