Negotiate a Debt Settlement

What is the best way to eliminate credit card debt without having to pay a lot of interest if very little?

Public Comments

1. There are credit counseling agencies who are a "middleman" between you and the creditor. Once you sign up, they are able to reduce your interest rate and stop late fees, etc. You must enroll with them, and usually they want an automatic deduction from your checking account. There is an enrollment fee, but sometimes it's waived. The advantage is that you pay a set rate, every month, that pays down your debt. On your own, the monthly payments change, and because interest rates are so high, if you make the minimum payments, your balance never goes down. The interest rate can push you into an "overlimit" status and then you'll get an "overlimit fee." The credit counseling arrangement stops all this. Your payment is often the equivalent of the monthly interest which is why your balance doesn't decrease. Downside: On your credit report, it will show you signed up with this program. Some creditors view it negatively -- that you're a poor risk because you had to have help paying a debt. Others see it as, you took steps to fix a situation and the creditors got their money. WATCH OUT who you sign up with. THere are several scammers that collect your money and it's never given to the creditors. There are class action suits against some companies. I recommend American Consumer Credit Conseling out of Newton, MA. They ARE legitimate. I have personal experience with them. These companies only work with credit card debt, so if you have a car loan or a utility bill, you're on your own but they're great for credit card situations.
2. If you currently have a lot of money charged on your credit card and want to stop paying large amounts of interest the easiest option is to transfer the balance to another credit card with a 0% introductary rate on balance transfers with no balance transfer fee. Discover card has such a card, just visit their website and you can apply online. They don't charge any fee to transfer the balance and they don't charge you any interest for 12 months! Pretty good deal to eliminate your debt by making monthly payments and not paying any interest. In 12 months you could transfer the balance to another credit card that also charges no interest or balance transfer fees.