Credit Card Debt – a vicious circle of accelerating Debt
Burden Free’s Settlement Advisors assist with settling medical debt, personal loans, car repossessions, old business debt, and most importantly credit card debt. If you are having trouble managing credit card debt, Burden Free’s credit card debt settlement services may be right for you. In 2009, the national total for credit card Debt is nearing $1 trillion and a record number of consumers – 4.04% – are now reported as delinquent, according to Fitch's Prime Credit Card Delinquency Index. At the end of 2008, the average outstanding credit card debt for households that have a credit card was $10,679. (Nilson Report)
Consumers are lured in to new credit cards by low interest rates and special promotional offers, without realizing that the credit card companies can change the terms of the offer due to any number of circumstances with little or no warning. With the poor economy, more and more people are getting into trouble with credit cards. A single adverse life event - such as a job loss, a decrease in pay or work hours, a family illness, a spousal death or divorce - can trigger a financial crisis that can cause credit card debt to careen out of control. At this point, credit card debt negotiation could quite possibly be a consumer’s best option.
Running on Empty
Interest rates have skyrocketed over the last year even for those with impeccable credit, but the matter is made all the worse for those who have fallen behind by as much as one late payment. In addition to late payment fees of $20 to $40, interest rates are hiked up immediately - rates approaching 30% are not uncommon. In fact, you don't even have to be late on any one card to be penalized. Many credit card companies have a "universal default clause" in the small print of their agreements stating that they have the right to raise your rate if you are in arrears to other lenders, such as you car loan or home mortgage.
Even if you are able to manage minimum payments, you are still in a precarious position. Use this credit card calculator to see how long it will take to pay off your credit card debt by making minimum monthly payments.
Example: To pay off a $5000 credit card with an 18% interest by making minimum monthly payments of 2.5%, it would take 313 months - more than 26 years - to pay off that debt, with $7,115.39 total interest paid.
Settle Credit Card Debt and Stop the Cycle
While many consumers look for new federal regulations scheduled to take effect in 2010 to provide some relief from these practices, any relief will be too late for millions of consumers who are already in deep financial trouble. If you are in over your head, waiting will only compound your problems. Many consumers attempt to settle credit card debt on their own (which is possible), but lack the experience in credit card debt negotiation. Check to see what your monthly payment could be by entering your total debt amount into our Debt Settlement Calculator. A credit card debt settlement service may be an ideal solution because it can actually negotiate your debt down by as much as 50% – allowing you to settle and pay your debt in a drastically reduced amount of time.
* Individual results for each program may vary based on ability to save funds and creditors willingness to negotiate. Program does not assume any Debt or provide credit score assistance. Program not available in all states, so please review all terms and conditions of program prior to enrollment.