Credit Cards | | Guru Goddess

How to Negotiate a Debt Settlement Yourself

Would you like to negotiate settlements on your debt accounts? You might believe that you have to pay a firm to negotiate a debt settlement for you. However, if you can talk, read, and write, there is nothing they can do for you that you can’t do for yourself.

Follow these important tips if you want to do the negotiating yourself and save some money. With skillful negotiation, it’s possible to get your debt reduced by as much as 75%!

Not paying your debts in full will have serious negative repercussions on your credit report. But keep in mind that continuing to be late with your payments can be just as bad.
It will be more difficult to get additional credit in the future for a while, and the account that you’re settling will be cancelled.
Be sure your negatives don’t outweigh your positives.
As long as you’re making payments, your creditors won’t work with you on a settlement. You’ll need to miss some payments first.
They must think that a settlement is the only way they can get paid.
For example: that you plan on declaring bankruptcy if you can’t reach a compromise (wherein they might not get paid at all)
Just like the used car salesman never gives you his best deal at first, your creditor will hold back initially. Have the patience to wait them out.
You should be able to settle for paying a maximum of 50% of the principal at the time you first started defaulting on your payments.
Don’t ever write a check based on a phone conversation. Be sure everything is in writing and on company letterhead.
Many people have thought they were settling their debt, only to realize that they had been mislead and were merely making a payment that was applied to the original balance.

Settling your debt is something anyone can do; you don’t have to pay thousands of dollars to a debt settlement firm. It may seem nerve wracking, but remember that the person to whom you’re speaking does it all day, every day. If it’s your only option besides bankruptcy, be aggressive and patient.

Be certain to get everything in writing. What is said on the phone means little, unless you can prove it. Follow these tips to get your best deal. You really can do it yourself!

How to Apply for New Credit to Help Improve Your Credit Score

What if you’ve applied to card companies in the past but have gotten rejected? There are still things you can do.

One option is to get a secured card. Get one at a bank around you, and preferably the one you do business with. You have the best chance of getting accepted there. Also, focus on cards that are designed only for those with poor credit.

But don’t apply for too many at once.

If you get too many credit inquiries, financial companies will assume you are taking on more debt and will be less likely to work with you. It can also negatively impact your score.

And be cautious.

Just because you get accepted for a card doesn’t mean you should use it. Some of them will do more harm than good.

For instance, many have hidden rates such as very expensive late fees. This is particularly true of the bad credit cards. If you aren’t able to make all your payments, you will soon find yourself up deeply in debt again.

What about prepaid cards?

Don’t use them. They have no impact on your credit score. This is because you are just paying them off upfront, so there is no chance of default.

But remember to pay your bills on time.

There’s no point in getting a new card if you are just going to continue making late payments.

What if you can’t make your payments on time?

Then just spend what you have and no more. And you might have more money than you think. Do you really need that new tool set? What about all those magazine subscriptions? Try to cut back and budget where you can so that you can prioritize reducing your debts.

How long does it take to rebuild your credit?

It depends on your situation. But you didn’t get a bad credit score overnight, and you aren’t going to wipe it out that fast either.

Just make sure your payments are on time every month, and eventually your small efforts will add up. By faithfully paying your bills on time you will see a big difference.

Credit Card Question, Part 2

Continued from Part 1
*Insurance Coverage
Also remember that charging certain items on a major credit card can confer some extra benefits. For example, car rental liability insurance is offered by some major credit card companies. If your card has this coverage, you don’t need to pay the incredibly high fees for the “loss and damage waiver” car rental companies try to charge you when you rent a car.

Insurance coverage for baggage lost when you fly is also available, depending on the credit card you choose. In fact, some credit card companies offering this insurance actually cover in addition to what the airline will pay you for lost bags. This baggage coverage is no cost on some credit cards and is well worth having. Travel insurance is also included, so that you would not lose the whole cost of the flight, and would just need to pay a ticket change fee of about $50 to $100 if an emergency cropped up. If the flight is a long-haul one, this insurance coverage is worth having.

*Consumer Protection
Price protection for items you purchase that drop in price after you buy them is offered by some companies. Stores must allow a 30 day ‘cooling off’ period with an unconditional money-back guarantee. They should honor any price differences and refund the money within 30 days. Some major credit card companies allow up to 60 days and will refund you such price differences.

*Fraud Protection
A debit card will not usually confer all of these perks. And indeed, the major difference is the most crucial one: You liability with credit cards in the event of identity theft or fraud will be zero or much lower with a credit card than with a debit card. With a credit card, if you suspect anything fraudulent, you have up to 90 days to report it. With a debit card, you need to report it within 2 business days. Otherwise, you will be liable.

If you do not look at your online banking account that often, or you are overseas, for example, this can be a major financial disaster. Therefore, use your debit card only sparingly for online purchases, and use a credit card instead because of all the extras it offers. Then pay off the bill at the end of each month.

*Determine Your Benefits and Weigh Risks Versus Rewards

One final suggestion is to take time to read all the fine print on a credit card application to determine what special privileges and perks you get with your card, or call customer service and ask. Then choose to use the card that gives you the most benefits in terms of cash back, benefits, insurance, and other perks.

Credit cards do not have to be a disaster and can indeed improve your credit score and even help you save money if you care cautious and learn how to use them to your advantage financially.

For more information on how to improve your family finances, see

Emergency Fund 101: How to Save Money for Unexpected Expenses

and

Your Recession Survival Guide