So many Americans are drowning in consumer debts and are trying to figure a way out, that will relief them of the stress so they can move on with their lives and put their hard earned money to better use.

If you want to settle your debts with you credit card companies, you will first need to figure out what type of bank you are dealing with. In figuring this out, you can come up with a more effective game plan to approach them for settlements.

First there are the mail order type credit card banks. These are the banks that solicit consumers mainly through direct mail, phone or internet, as they have no local branches to service their clients. Examples of these credit card banks are Capital One and MBNA, and their cards normally have an interest rate from 6% to 25%. If you are contacting one of these lenders for settlement, you will want to get to either the collections department or their work out department. These are the departments that are equipped to negotiate settlements, not the customer service department.

Second, there is the bad credit type credit card banks that have hefty annual fees, high interest rates as they lend to borrowers that have less than perfect credit. Because these lenders lend to what are considered risky borrowers, they are not the most flexible banks to work with.

Next are National banks that market only to their existing client base, but don't have the most attractive interest rates. These banks however will bend over backwards to assist their clients and are more than happy to grant payment holidays which will give you additional time to make your payment or even allow you to miss a few payments.

If you contact customer service to request a lower payment with any of these credit card companies, they will more than likely tell you no. That is why you will want to get them to transfer you to the collections or work out departments for rate reductions or settlement requests. As the economy gets worst and more and more consumers are experiencing financial hardships, then these consumers will stop making their credit card payments which will increase the default rate of credit cards. The higher the default rate of credit cards, the higher interest rates on these cards will go to compensate the lender for their losses; unfortunately this will roll over to consumers that have always been on time with their payments.

Whether you are negotiating for a lower rate or settlement with your credit card company, you will want to do as much research as possible to learn how to approach them. Most consumers that fall behind on their credit card payments assume that bankruptcy is their only option. This however is not the case; you have debt settlement, consumer credit counseling and bankruptcy which should be only considered as a last resort. With the recent reform in the bankruptcy code, it is harder for consumers to file a chapter 7 bankruptcy, which would wipe out all their debts and instead the courts are approving them for a chapter 13 bankruptcy, which is a repayment plan to the credit card companies. The recent reform was designed to benefit the banks and not consumers. You want to take the initative as soon as possible to get out of debt, as it does not benefit you to be paying credit cards for the rest of you life.

Author's Bio: 

Marlon Baugh is a nationally-known debt elimination expert. Since 2003, he has specialized in helping consumers with Bankruptcies, Foreclosure or with other credit issues. If you would like a Free Copy or to get instant access to the remainder of this Insider Report, please visit or Call 954-678-5796