Can You Settle Retail Card Debt?
Retail card debt can be some of the most difficult debt to manage. In many cases, retail cards come with astronomical interest rates. As a result, getting behind on your payments can mean digging yourself deep into a debt hole.
So what can you do if your retail card debt gets out of control? Like other kinds of consumer debt, settlement may be an option for your retail card debt.
What is Debt Settlement?
To understand settling retail card debt, you’ll first need to understand the basic foundation of debt settlement. Debt settlement is the process of making an agreement with a creditor to pay a smaller portion of the total debt owed. This process is generally only effective if the borrower has defaulted on the account. Because the borrower hasn’t been making payments, the creditor may be enticed to settle because they will then be recouping some of the debt owed rather than none of it. The creditor may agree to a lump-sum payment or to a fixed number of payments for the settlement.
Can a Debt Attorney Settle Retail Card Debt?
In short: yes. You can attempt to settle retail card debt yourself, but it may be best to go through a reputable debt attorney. Debt attorneys most likely have longstanding relationships with creditors. Often, retail credit cards are facilitated by other credit card or financial companies. Debt attorneys will also understand the legality of your debt, especially if you’ve had any legal action taken against you. Even if you haven’t been sued for your debt, a debt attorney can help you navigate the process of settling your retail card debt and help you get back on track. If you’re struggling with retail card debt, contacting a reputable debt attorney can be a good first place to start.
How Can I Avoid Retail Card Debt?
The biggest downside of retail card are their extremely high interest rates. So on the flip side, their biggest benefit is that they often offer enticing rewards. And your cashier will often remind you of these rewards every time you check out at the store. If you shop at that retailer frequently, the promised rewards may be enough to convince you to open a store card. However, that high interest rate can then wreak havoc on your finances and therefore negate the value of the rewards. In addition, retail store cards can be helpful for those looking to build credit because they’re generally easier to qualify for. But they can be especially dangerous for those who are building credit for the first time or looking to improve their credit after a drop. Also, remember that opening a retail credit card is a hard inquiry on your credit report.
To avoid going into retail card debt, first decide if having the card is truly worth it for you. Will the benefits outweigh the potential negatives? The key to managing retail card debt is to only charge what you’re sure you can pay off in full every month. Not carrying a balance will help you avoid the dangers of the high interest rate.
If you’re already dealing with retail card debt, consider adjusting your budget to free up some funds to pay it down. Look for places you can cut back or downsize, even just temporarily. The more quickly you can pay down your retail card debt, the better off you’ll be and the less interest you’ll pay over time.
You don’t need to completely steer clear of retail credit cards. Instead, it’s best to only charge what you can pay off to avoid the high interest rates. But if you’re having trouble with retail credit card debt, debt settlement may be an option to help get your finances back on track.
The debt professionals at Tayne Law Group, P.C. are here to help with your retail credit card debt!