More Credit Card Lenders Offering Settlements

If you’re like many other Americans right now, you may be facing a dilemma with your overdue credit card payments. Consider this. When the credit card company contacts you trying to collect on the balance, you could see if they’re willing to settle the debt for lesser amount—an amount that you might be able to pay back!

Even though these settlement options have been there, many cardholders haven’t taken advantage of them. That has begun to change. As first noted in the New York Times, a growing number of consumers are looking to settle up with credit card issuers rather than defaulting on their credit card debt. What’s amazing is that the lenders themselves are often the first to offer settlement plans on the spot.

This isn’t to say that every cardholder will qualify for settlement options, but a vast majority have a better than average chance. This comes down to leniency on the part of card issuers.

These lenders understand clearly that more consumers are falling behind on payments as the national unemployment rate continues to rise. Even the figures help paint the picture in starker hues. Credit card defaults soared to record-breaking 10% in May. This meant that 10% of the outstanding balances were deemed uncollectable.

This move on the part of lenders comes in the wake of the intense legal and ethic scrutiny that has been leveled at the debt settlement industry. Regulators have accused different companies of charging exorbitant fees while failing to carry out the promises they made to client, and ultimately leaving the consumers if worse financial shape than when they came for help.

Still, cardholders will have to deal with some consequences for approaching lenders for debt settlement. Obviously, your credit score will drop. Also, any debt that has been forgiven will be considered income; thus, it is taxable.

If you are interested in credit card debt settlement, then the first step is approaching your lender. Who exactly qualifies for this aid is up to the discretion of the card company.

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