Negotiating Credit Card Debt
61You may want to walk away from credit card debt, but you can't hide from creditors. As a matter of fact, walking away is probably the worst possible option for handling a debt problem.
While credit cards are considered unsecured debt, and no one will show up at the door to repossess anything, credit card issuers have many other options for getting their money back and making your life miserable in the process. Creditors have the power to:
Make it harder to get a job or promotion. A negative mark on your credit report will raise questions and concerns that may result in you being a less-attractive employee.
Raise interest rates. Under the universal default rule, all other cards will raise their interest rates if you are overdue on one card. In addition, your credit score will go down, meaning new loans and credit will cost more.
Raise insurance rates. Bad-credit risks pay more for insurance, may fall outside of underwriting guidelines and may not be offered renewals.
Prevent you from getting an apartment or house. Landlords often check credit ratings during the application process.
Call at all hours of day and night. Delinquent accounts are turned over to collectors and lawyers or sold to professional debt buyers. The Fair Debt Collection Practices Act protects consumers from abusive collectors, but it does not prevent legitimate collection procedures.
Legal action.Creditors have the right to sue to recover money that is owed them. This could result in liens on assets and garnishment of wages.
Try to talk to your creditor you may be able to negotiate a payoff play, eliminating those rapidly mounting interest and over limit fees. In lieu of that, a reputable non-profit credit counseling agency could help negotiate a settlement based upon your personal financial situation.
Negotiating Credit Card Debt in the News
- Eileen Ambrose: Be careful with debt settlement firmsBaltimore Sun16 hours ago
Eileen Ambrose -- Personal Finance T he number of debt-settlement companies nationwide has grown into the thousands as more strapped consumers are turning to them to help wipe away debt.
- Handling holiday debt may not be cut and driedThe Clarion-Ledger3 days ago
You have $1,000 in holiday debt in one hand. In the other, an offer to move the balance to a credit card with a lower rate. So what's the hold up?
- Figuring balance transfers takes timePoughkeepsie Journal2 days ago
NEW YORK — You have $1,000 in holiday debt in one hand. In the other, an offer to move the balance to a credit card with a lower rate. So what's the holdup?
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