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Credit Card Debt Settlement Mistakes Many people do not have the funds or the ability to pay off their full credit card debt. This usually damages their status financially so they find other methods to help them in the process. I strongly recommend that you analyze your decision to avoid long term damage to your status financially. Also, there could be legal complications and ramifications if done incorrectly. In order to maximize your credit card debt settlement, I recommend avoiding the following methods (and mistakes) that I list below. There are many pitfalls on the path to settlement, and you should be weary of shortcuts. There are proven methods that work and have worked for many years. When it comes to your financial future, walk the tried and true path of honesty, integrity, and transparency. Terminating the Account It can be extremely frustrating not having the ability to meet the rising interest rate and debt balance. Many find that the only apparent way to deal with this problem is to terminate the account. This is the equivalent of fixing one minor problem to then turnaround and create a major one. What you don't know is that this action causes a major dip in your credit rating. A possible solution to this dilemma is to set aside the usage of the credit card(s). It may be difficult at first but it is a better solution. Also, make sure you continue to settle any existing credit card debts while you avoid accruing further damages through credit card usage. Consolidation of Debt As you know, debt consolidation is a popular method among those who have issues with debt. Now, this option has helped some, but it is not always the best path to relieve your debt. For those unfamiliar with debt consolidation, it is when you find a new creditor to pay off any of your existing debts. What you have done is created an account with a new creditor who you will need to settle with. A positive of this method is you no longer have multiple debts, just one consolidated debt to pay. You can also negotiate a lower interest rate (but this extends the life of the loan and payment period). Remember, with debt consolidators there are upfront fees, and a statement of third party assistance will now reflect on your credit report. In conclusion, there are more mistakes that can be made while settling your debts. These are found in paying high interest rates or opting to settle a minimum balance. In a future article I will write on these subjects. Just remember, you are in control of your financial destiny. A shortcut may seem positive but in truth there are always drawbacks. Do your due diligence and you will be fine. There are many scams out in the open market today. With the ease and power of the Internet however, research is made simple. Any company you use for debt settlement, consolidation, or otherwise I strongly recommend researching them. What other business have they done? Do they have any referrals? Do they have a working contact phone number (not just an email address)? These are great ways to check and see if a company is legitimate. When it involves your money and your future, take charge now! It is up to you to take care of your business. Gene Barber is a credit advocate of the people educating individuals on the truths behind financial responsibility and accountability. You can read more of Gene’s articles at his blog here
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Common credit mistakes, common debt settlement mistakes, debt settlement, credit card debt, debt reduction,
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