A smart approach to managing one’s personal finances is to repay credit card debt while eliminating the possibility of additional fees. Though “settlement” typically refers to discussions with the credit card company to develop an alternative payment for a reduced amount, it may still negatively impact a credit score.
With this in mind, it is always a sound way to investigate possibilities that allow for paying back the full obligation without additional fees. Discussed here are aspects that detail how this works.
Understanding credit card settlement
In a credit card settlement, the card holder and the card issuer negotiate an immediate payment of a lesser amount in exchange for settling the entire account. In cases where a cardholder has no means of paying back the debt, card issuers may initiate such a procedure.
In conclusion, taking care of your finances, reaching out to your creditors, and knowing the facts will help resolve credit card payments without incurring hefty charges. By implementing the strategies discussed above, individuals can manage their debt responsibly without the hassle of losing their good creditworthiness.
Disclaimer: Mint has a tie-up with fin-techs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.
