Financial Knowledge Online

Many people are under the erroneous belief that there are no legitimate ways to eliminate unsecured debt. If you are careful, however, this simply is not the case. There are, in fact, a number of relatively simple and effective ways to improve your financial future.

Paying down unsecured debt can really make a tremendous difference in your day-to-day life. In addition to reducing the amount of stress that is typically associated with credit card problems, reducing your debt frees up enough cash to live a little instead of simply living paycheck to paycheck. As such, here are a few simple ways that you can eliminate unsecured debt once and for all.

Get Your Creditors to Settle for Less

Perhaps the quickest way to reduce the amount of money you owe is to contact your creditors and ask them to settle the obligation for less than your statement indicates. Many times credit card companies will waive, reduce, or even eliminate interest charges and over-the-limit fees. This is particularly true if you have paying timely each and every month. Furthermore, if you offer to pay off the entire balance in one lump sum, many companies will reduce your balance by up to 50% of the outstanding balance.

Consolidate Your Unsecured Debt

When you are drowning in debt, many times the minimum monthly payments is more than you can afford to pay. In these types of circumstances, it may be beneficial to consolidate your unsecured debt with one credit card provider. Not only does this make writing the monthly checks much faster it often leads to lower accrued interest ; allowing you to eliminate unsecured debt much faster. It is, however, crucial that you pay attention to the interest rate you are being charged. Those individuals with bad credit may end up being charged ridiculous interest rates which defeats the entire purpose on consolidating your debts.

Seek Support via Christian Credit Counseling Services

Let’s face it; not everyone understands their finances as good as they should. While it is certainly nice to have a solid financial knowledge foundation to begin with, you can, with a bit of hard word, learn everything you need to know to get back on track and secure your financial future. Many Christian credit counseling agencies offer a free debt analysis. Often this can be enough to get you started as it is not always necessary to pay someone for this help.

Get a Second (or Third) Job

Yes; getting another job is not a fun idea. After working eight to ten hours at one job, there is nothing worse than having to go to another one. When I was in college I actually had three jobs, so I completely understand. Many times, unfortunately, your debt problems are not actually expense issues but are income issues. As such, another source of income can really work miracles.

Let’s say, for example, that you get a part time job that pays $8 an hour. If you work one eight hour shift a week, you could easily send off an extra $250 a month to your credit cards. This, by itself, can be a powerful way to eliminate unsecured debt. Combine a few of the simple strategies together and you definitely have the beginnings of a sound financial future.

While it may seem a bit overwhelming at first, you can negotiate a credit card settlement yourself. Before we get started, however, you need to know that this process can take a lot of time and energy. With that being said, savvy consumers can often eliminate unsecured debt, free up additional spending money, and even avoid bankruptcy all on their own without having to pay a debt consolidation company a dime. If you are already behind on your bills, you really have nothing to lose. Here is one way to negotiate a credit card settlement yourself.

How to Negotiate a Credit Card Settlement Yourself

Start at the Beginning

Before you can even get started, you have to know where you stand. Take a few minutes and find all of your current monthly bills. You will need to know how far behind, or how many payments you have missed, for each company that you owe money to. Many people will find it helpful to organize this information into separate lists. This will ensure that you have the appropriate information at your fingertips when you start negotiating.

Determine Your Expense Budget

After you have determined how much money you owe, you need to figure out how much you can afford to pay each month. To do this, it is crucial that you create a written budget. It is also important that you do your best to be conservative. It is way too easy to think you can live on next to nothing each month. In addition to your normal, routine expenses, you need to budget in the fun stuff as well. You will spend money so you might as well go ahead and budget for it.

Establish Your Expectations

While it is certainly true that you will want the best possible deal as you negotiate a credit card settlement yourself, you need to set realistic expectations. Settling for 20 cents on the dollar is not realistic (although it does happen). Paying 60 cents for every dollar of debt is a much more likely scenario.

Know Your Rights

Many credit card companies are ruthless; plain and simple. They will do anything in their power, even violate your rights, to get you to pay your debt. As such, it is always a good idea to visit the official website of the Federal Trade Commission. Spend a few minutes browsing this site so that you will have a better understanding of what they can, and cannot, do or say. Always remember that even when you negotiate a credit card settlement yourself, you have rights.

Make the Call

This is perhaps the most nerve-wracking step you will have to do. Picking up the phone is, however, half the battle. Pick one of your debts and call them. Be polite and ask to speak to a supervisor. The initial rep will, of course, try and get you to speak with them. Be persistent and ask for someone who can actually make decisions. Once you have the supervisor start slowly and explain that you cannot afford to pay all of your bills and that the companies that agree to work with you will get paid before those that won’t.
Start your offer relatively low, but do not insult them. It is also important to give yourself a bit a wiggle room in case they produce a counteroffer.

Get it in Writing

If you do not get it in writing, it did not happen. Regardless of any assurances provided by the supervisor, you must get the agreement in writing. In every case, you will need proof so that if they decide not to honor the new amount you will have evidence to support your claim to a reduce amount. If they do provide a settlement in writing, you need to pay the agreed amount within the established timeline.

While it is certainly a tedious, and time consuming process, you can actually negotiate a credit card settlement yourself.