Smaller Credit Card Debt Interest Payments and Fees - Learn How to With Legitimate Debt Settlement

April 6, 2010 - PRLog -- Did you ever understand the secret of Credit card companies? Most Credit card companies are rolling in money. They have been able to successfully fleece their customers and make huge profits. Take the example of a small time Credit card user. Let us assume that the user has a debt of $500 in the very first month of joining. The user is advised to pay only the minimum amount which could be just $100. While doing so the user does not realize that he will be paying a huge interest on the balance $400. This is how the first seed for debt sown.

This small debt spirals into an uncontrollable debt of thousands of dollars. Another component that gets added up is the late fees. Also remember that the interest gets compounded every month. What it actually means is you commenced your debt with a principle amount of $500. Interest fees built up over a period of time and got added up to the principle. Now the inflated principle is also attracting a hefty rate of interest. Is there a way out of this circle of debt?

Yes, debt settlements are the most effective form of debt relief. In a debt settlement the user has to pay only 40 to 50 percent of the net outstanding amount of his debt. This payment has to be made in lump sum to the creditors. Balance of the amount is waived by the creditors since they get to recover a pump sum payment.

Why should the creditors agree to waive 40 to 60 percent of the outstanding amount? This is the most common question asked by users. It has a very logical answer. It is an incentive offered to the user. If the user does not pay up at all he may file bankruptcy leading to a total loss to the Credit card company. Therefore they prefer to recover some amount from the debtors instead on nothing at all.

Bankruptcy is certainly not your best way to deal with debts. Debt relief and debt settlement can certainly make a difference, and eliminate a strong percentage of your debt and in the meantime you will avoid the consequences of having to file for bankruptcy. Make sure you are always informed in regards to the best solution for you, and eliminate as much debt as you can. If you want to find more about this, check out the following link:
Free Debt Advice
(http://www.freedebtsettlementsolutions.com/)

contact us for free debt advice = 8883613619

# # #

FreeDebtSettlementSolutions is a matchmaker in the debt settlement industry. They have paired up thousands of consumers up with debt settlement companies who are most likely to get consumers the best deal.

http://www.freedebtsettlementsolutions.com
contact us for free debt advice = 8883613619