Most people today often do not know where to turn when they find themselves in need of debt settlement services. So, the go onto the Internet and type in something such as Credit Card Debt Help or Debt Reduction Services. From there they get a list of companies who portend to be the best credit card debt reduction company in the USA.
Well, we have compiled a list of the 10 best things in debt relief services for you to review.
1.) How long has the company been in business? Usually, a credit card debt reduction company that has been providing debt reduction services for more than ten years is more likely to have a better track record than one that has only been in business for two years.
2.) How do you do that? The best way is to go online to the Better Business Bureau. Here it will not only tell you how long a company has been in business as well how the debt reduction services company is rated on a scale of A to F.
3.) On this same note: How many complaints does the company have against it? Obviously the lower number of complaints, the better.
4.) Fees? What does the debt settlement services company charge in fees? The going rate these days is between 20% – 30% of the dollar amount saved (explained below).
5.) Are there ongoing costs? Very important!
6.) Privacy? What is the debt settlement services company policy? For example: Do they sell your information to third parties?
7.) Referrals? Do they offer referrals? Most companies do not, as most people do not like to be contacted about their debt problems. However, if they do…great!
8.) How is your money handled? For example, does the debt reduction services company hold your money (big red flag), or do they use a third party administrator/bank to hold funds in your name only!
9.) If the company uses an outside bank to hold your funds, are there ongoing fees as mentioned in item number four.
10.) Contracts? Every credit card debt reduction company should have you sign some type of agreement with them for the services they will provide for you. You should be given that agreement in advance to review BEFORE signing on the bottom line. Take the time to read it!
The way fees are typically charged for credit card debt help is fairly simple. Most companies charge you a percentage (20% – 30%) of the debt amount you saved. For example, you owe creditor XYZ $2,500. The company then negotiates that down to say $875 for you. In this example, you saved $1,625 ($2,500 – $875) on this settlement.
Then let us say the company charges you 30% of the savings for their fees. In this example, your cost for the settlement would be $489.60 ($1,625 x 30%). Your total cost for that settlement then would be $1,364.60 ($875 to the creditor + $489.60 to the debt settlement company). Again, you originally owed $2,500 to begin with. Therefore, if you divide $1,364.60 by $2,500 your total out-of-pocket expenses were 55% of what you originally owed on your credit card.
Again, if you are stuck with paying your credit cards and it seems like you are getting nowhere, why not take a look and see if a debt settlement services company is right for you?