Credit card settlement is also known as debt settlement, and is an increasingly popular way to find debt relief.
It is rapidly replacing consolidation of unsecured debts because it does not require the obligatory collateral backed loan.
Credit card settlement has been used for several years, but more recently, the big lending institutions and creditors got an incentive to use it even more.
As a part of the government's big stimulus package that it handed out to corporations, part of it was an enticement to give borrower's a break.
While the average person doesn't think that they saw any of the big bailout money, they actually are seeing it now.
And, it comes from creditors being more willing to negotiate on the amounts owed to them.
They are more willing to take a percentage of an amount owed them rather than litigate for the full amount.
Debt or credit card settlement works a little like credit card consolidation.
A company rounds up all the consumer's unsecured debt, and works with each creditor to renegotiate the balances.
The consumer ends up paying one sum into a monthly program that eventually works to pay off the lesser balances.
While it is possible for a person to do this on their own, it is usually with less success than if a professional arbitrator does the work.
Each big credit card company has different rules, policies and ways they tend to work, and by hiring a professional, they can get better deals for the consumer.
While debt resolution companies charge a fee, using them also allows the consumer to keep working, keep having a life, and spending time accumulating money to get out of debt.
And, if one considers what the fees go for, then they make sense.
Professional negotiators, management of the special fund, and even legal advocates to help with harassing debt collectors all come out of the fees.
While credit card settlement doesn't work for everyone and has certain qualifications, it is one of the best methods around for getting out of debt.
It takes fortitude and learning to get rid of credit card spending habits, and learning once again to live on income.
If the consumer combines this program with some time spent in learning new financial habits, the chances are greater that once out of debt, they won't fall back into it again.