Credit card debt is no joke. It is the easiest type of debt to rake up, with very few warning signs. One must be extra careful when spending money via credit. It can take ages to pay off. There are many rampant myths being about credit card debt. Let’s debunk them!
- “Too good to be true” is not just a linguistic expression, it also applies to the companies that claim to vanish your debt for peanuts. Don’t fall for the siren songs and read the fine print before entering into contracts. There is no completely painless way of debt resettlement.
- Debt settlement offer is not made to just anyone. It is usually only for customers afflicted with job loss, a divorce, medical problems or some other major life incident. Don’t rely on debt settlement if you don’t fall in these categories.
- Debt settlement methods do not always come with a price tag. There are many free self-help and expert help methods like snowball/debt dash, asking your lender for relief, rolling debt into a single lower-interest loan — that are available to anyone with the slightest bit of resourcefulness.
- Debt settlement company is never in control of your money. Not since October 2010, when the FTC blocked debt settlement companies that market their services from collecting advance fees.
- Debt settlement might harm your credit score just as much as declaring bankruptcy.
- A debt-settlement program is not cheap. The debt-settlement companies earn their share on a percentage of your total debt or on the amount forgiven. They also charge fees for late payment, added interest and income tax implications. The trick is to find a company that charges according to your budget and won’t trick you!
- Unsettles debts do not stay on the record forever. Debt Collection has a statute of limitations.
- Debt settlement or bankruptcy are never the only options. Forbearance and counseling are also two important factors to consider.
- A few debts do not qualify for settlement such as student loans, taxes owed, child support, alimony.
Any secured debts on a house, a car, a boat, or a collateralize personal loan can’t be easily settled, unless the security is repossessed, or demonstrated to be worthless. Therefore, have care before raking up credit card debt.