Reduce Credit Card Debt The DIY Way

If your credit card debts are getting out of control then maybe you have considered ways to reduce credit card debt. There are a variety of debt relief options which include credit card debt settlement, credit card debt consolidation, and for the really hard up, there is of course bankruptcy. However there is a third path which, although lesser known, is nevertheless an effective debt relief strategy for some credit card debtors, and that is do-it-yourself credit card debt reduction.

The DIY Way to Reduce Credit Card Debt
Other than bankruptcy, there are two po
pular debt relief strategies. The more moderate option is credit card debt consolidation, whereby a debt relief company negotiates for a reduction in interest rates, while the more extreme option is credit card debt settlement. With debt settlement the debt relief company negotiates for a one-off settlement of the debt principal at a highly reduced rate.

Both strategies have their appeal, for instance debt consolidation produces inferior debt savings over a longer timespan than would be achieved with credit card debt settlement. With that said, debt settlement has more potential downsides. Regardless which method you use to reduce credit card debt, the debt relief company will charge you a fee. In the case of credit card debt consolidation, they will charge a monthly servicing fee throughout the credit card debt consolidation process. This can become a considerable expense since debt consolidation usually runs on for two or more years.

As for debt settlement, the debt relief organization only charges you once they have successfully reduced some of the principal from your outstanding debts. Usually their fee is in the region of 15%. For example, if they reduce 40% from the debt of $20,000, then this comes to a saving off $8,000 and a fee of approximately $1200 (8% of $8,000 savings).

So there is no question about it, if you opt to reduce credit card debt, without joining a debt relief program, there are some savings to be had. However, if you reduce credit card debt by the do-it-yourself method, there are also some downsides to bear in mind.

What are the Downsides of the DIY Way to Reduce Credit Card Debt?

If you decide to reduce credit card debt with the do-it-yourself option, it requires making contact with your creditors by yourself rather than via a debt settlement company. It is the lack of leverage which is a potential downside for anyone who wants to reduce credit card debt, without joining a debt relief program.

Debt relief organizations have both experience and an in depth understanding of credit card companies and how they work. Their employees understand the protocols which each credit card company applies, and more than likely they will have a good working relationship with most of them. This means that once they contact a credit card company they are more likely to make some progress on your behalf.

However, if a lone credit card debtor contacts their credit card companies, seeking to reduce their debt, or even to reduce the interest on the debt, chances are that unless they withhold their credit card payments for a long time, the credit card company will stone-wall them. And even if they withhold their payments, in order to gain leverage, in the process their credit score will be downgraded.

In a nutshell, it’s not that the individual credit card debtor can’t do a good job on their own. Rather it’s just that, unless they know what they are doing, they will more than likely either; alienate the credit card companies, and go nowhere fast, or they will only achieve a small degree of either debt reduction or interest rate downgrading.

I Want to Reduce My Credit Card Debt Myself – How Should I do it?

If you want to reduce credit card debt on your own, the first step is to take the debt relief process seriously. There is no point in thinking to yourself that you are going to save on fees and then not make a serious effort at the debt relief process.

Furthermore, unless you are well versed in negotiation and have a good understanding of how credit card companies operate, you will have a difficult time. However, there is help at hand under the guise of debt relief DIY negotiation courses, which walk you through the stages required to renegotiate your debt package. While there is a charge for these services, on a positive note their fees are fairly low, ranging anywhere from around $100 to $600, depending upon the type of course.

Of course, these self-negotiation courses will not suit every debtor, because it must be kept in mind that they presume both have a high level of organizational skill and negotiation aptitude, which quite frankly not all credit card debtors have these traits.

In summary then, if you wish to go down the DIY route, unless you are used to negotiating with financial institutions, you would be best advised to consider a coaching course. Furthermore, if you want to go the do-it-yourself direction, it is necessary that you have a certain set of aptitudes, otherwise, you well be better off simply hiring the professionals to negotiate on your behalf in an effort to reduce credit card debt.

Certainly, it is possible to reduce credit card debt, with the do it yourself approach. It doesn’t suit every credit card debtor. However, many credit card debtors do manage to reduce credit card debt by taking up the DIY route, so maybe it is also your way too.