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Knowing credit card debt facts will give you an advantage in negotiating the best options to get yourself out of debt. Even if you feel you are in over your head, there are simple protections in place to give you options. You have the ability to preserve your best interest when you have credit card debt. Be proactive and knowledgeable, and you can take control of your debt.
Fact #1: You Have the Right to Negotiate
The legal system has protections for borrowers, such as bankruptcy proceedings and settlements. These provisions exist to protect you from complete financial disaster. You do not have to go to court to start negotiations. Talk with your creditor before your debt goes into collections to receive the best response.
Fact #2: Creditors Are on Your Side
It may seem as if your creditors are the enemy. All of you want the same thing, though. You want to pay off your debt. Your creditors want to receive your payments. If you declare bankruptcy, neither of you will be happy. Talking with your creditors as if they are advocates will help your case. Avoiding phone calls, ignoring collections bills and becoming angry or hostile will not help your case. Your negotiations will be easier if you understand your creditors are on your side and treat them this way.
Fact #3: You Must be Notified of a Rate Increase
The Credit Card Reform Act, which went into effect in February 2010, will increase this notification period to 45 days. In addition, the bill stipulates that interest rates cannot increase on existing credit card debt. Know the law and hold your creditor accountable. If your rights have been violated, your debt may be eliminated.
Fact #4: You Can Defer Payments
Have you lost your job? Are you a recent college graduate who cannot find employment? Declaring financial hardship can provide for payment deferral. Credit card companies typically grant these requests because they will make more money off of your debt in the end. You will usually have your request granted only once. However, if you have encountered a financial hardship, inform your lender and negotiate for a lower or deferred payment cycle.
Fact #5: You Can Find Loans with Bad Credit
It will be hard to access new credit when you have excessive debt. Securing a bad credit personal loan may be an option to get you through the immediate future as you rebuild your financial stability. These loans are available if you have encountered a specific financial emergency, such as a costly illness. They are also available to help you pay off your existing debt with one loan. Bad credit personal loans are risky and expensive, but they can offer necessary benefits. Weigh the risks and rewards in your specific case to see if this is an option.
Fact #1: You Have the Right to Negotiate
The legal system has protections for borrowers, such as bankruptcy proceedings and settlements. These provisions exist to protect you from complete financial disaster. You do not have to go to court to start negotiations. Talk with your creditor before your debt goes into collections to receive the best response.
Fact #2: Creditors Are on Your Side
It may seem as if your creditors are the enemy. All of you want the same thing, though. You want to pay off your debt. Your creditors want to receive your payments. If you declare bankruptcy, neither of you will be happy. Talking with your creditors as if they are advocates will help your case. Avoiding phone calls, ignoring collections bills and becoming angry or hostile will not help your case. Your negotiations will be easier if you understand your creditors are on your side and treat them this way.
Fact #3: You Must be Notified of a Rate Increase
The Credit Card Reform Act, which went into effect in February 2010, will increase this notification period to 45 days. In addition, the bill stipulates that interest rates cannot increase on existing credit card debt. Know the law and hold your creditor accountable. If your rights have been violated, your debt may be eliminated.
Fact #4: You Can Defer Payments
Have you lost your job? Are you a recent college graduate who cannot find employment? Declaring financial hardship can provide for payment deferral. Credit card companies typically grant these requests because they will make more money off of your debt in the end. You will usually have your request granted only once. However, if you have encountered a financial hardship, inform your lender and negotiate for a lower or deferred payment cycle.
Fact #5: You Can Find Loans with Bad Credit
It will be hard to access new credit when you have excessive debt. Securing a bad credit personal loan may be an option to get you through the immediate future as you rebuild your financial stability. These loans are available if you have encountered a specific financial emergency, such as a costly illness. They are also available to help you pay off your existing debt with one loan. Bad credit personal loans are risky and expensive, but they can offer necessary benefits. Weigh the risks and rewards in your specific case to see if this is an option.
