Credit Card Debt Settlement Pros and Cons
Usually, any type of debt is a headache, be it a credit card debt or any other! The fact, that you are under debt and to add to it, your financial health is also not sound, hammers your mind continuously. Until the day you decide to go for a credit card debt settlement. Well, this is the way in which, each and every common man thinks! However, there's a difference between that common man and you. As, before opting for a settlement, you have decided to know some of the pros and cons of doing so. This is actually a part of the study of the debt settlement review. Knowing about the pros and cons would help you take a fair decision, favoring your financial condition.
Often, only the pros of the credit card debt settlement process have been emphasized. However, as we proceed, we will also highlight some of the possible cons of related to this. Nonetheless, the decision whether to go for it or not, lies entirely in your hands.
Credit Card Debt Settlement Pros
- Lowered Interest Rates: If you call up the credit card company and ask to compromise on the interest rate, then certainly, you would gain the benefit of paying money at a lowered interest rate. You would therefore not face much problems, managing financial funds for it. However, all this would be possible only when the company agrees to it.
- Lowered Monthly Payments: Surely, if the credit card company finds you on the verge of bankruptcy, it would lower or cut off some of your monthly payments. 'Getting something is better than getting nothing', is actually the thought behind it.
- Finishing it off Once and For All: This is probably the biggest benefits you can reap out of a debt settlement. If you are ready to pay a lump-sum amount on which even the company agrees, then just go for it! This is the best chance you can have to finish off this headache, once and for all!
- Savings: This is quite understandable and I need not explain much about it. Lowered monthly payments and reduced interest rates, would certainly help you save a lot of money, on a regular basis.
- Extra or More Payment: In the pursuit of saving money and acquiring lower interest rates, with longer duration of payment, you 'might' end up paying more than the actual amount.
- Another Loan Doubted!: Considering your current financial circumstances and the debt amount, you 'might' not be eligible for another loan. However, some financial institutions might give you a loan, but the interest rates for it might be quite high!
- Credit Counseling Problems: Generally, to make negotiations easier, there are debt consolidation and credit counseling companies. However, some might quote interest rates that are beneficial for their company and not for you. This can land you in serious trouble.
- Paying for a Long Time: For some people this might be a pro, but for some it might prove as a con! This is a pro for people, who do not have money, but have ample time to pay the debt. On the other hand, people who neither have money, nor have any time, may suffer from the financial point of view.
