Many people think that they know all there is to know about credit card issues and how to solve them. The problem is that much of the information that is out there is faulty, unreliable, or just plain incorrect. In this article, we will go over some of the biggest myths surrounding credit card issues.
1. Anyone can get their credit card bill reduced
Debt settlement firms often claim that anyone can get their debt reduced. They don’t, however, let people know that only consumers with heavy financial problems can get their debt reduced. Things like medical bills, divorce, and losing your job can help get you off the hook but otherwise, you are most likely going to have to pay the full amount of your credit card bill.
2. I have to hire someone to get me out of debt
A big myth involving debt is that you have to hire someone to negotiate with your credit card company. The fact is that credit card companies would actually rather discuss these matters directly with the consumer rather than dealing with a middleman.
3. Debt relief agencies are all the same
This could not be further from the truth. Debt relief agencies vary dramatically, but you’d be better off to choose a debt relief agency that belongs to the The Association of Settlement Companies (TASC). TASC companies will allow you to be in full control of your money at all times and only serve to offer helpful advice and experience.
4. Debt settlement companies are safe
Debt settlement companies that require you to send them the money for your credit card bill every month are not safe. That money is not insured and if the debt settlement company goes bankrupt or they decide to leave town, you will lose both your money and any good credit you have left.
5. Debt settlement won’t affect my credit rating
Asking a credit card company for a debt settlement won’t affect your credit score but once you do come to a negotiation with the company, it can do some serious damage. Likewise, skipping payments, like many non-TASC companies recommend, can hurt your credit score almost as much as bankruptcy.
6. Debt settlement agencies are cheap
Debt settlement agencies are far from cheap and you will most likely end up paying more in the long run than just negotiating with a credit card company yourself. Either way, debt settlement in general is going to cost you a lot more than you think.
7. It’s either debt settlement or bankruptcy
This is not true. Instead of debt settlement, try to find a nonprofit credit counseling organization near you or on the Internet. These groups will help you get back on your feet and out of debt.
8. With debt settlement, I’ll be out of debt in no time
Debt settlement can take years to get you completely out of debt and in the meantime, debt settlement companies will be sending you monthly bills for their services. If you play your cards wrong, you may as well have chosen a new creditor.
Justin Tucker blogs about credit reporting and scoring at TheCreditTruth.org. Learn how to make the most of your free credit report and improve your credit score.
Article copyrighted by Justin Tucker. Content published with author's permission.
