The Biggest Myths about Settling Credit Card Debt

by James Hendrickson on May 17, 2017 · 0 comments

visa-957187_640When you are struggling with your finances, hearing those debt settlement ads rattling around in the background always seem like an appealing option. And rightfully so since you’re in financial trouble and you need some help.

But is it really the best option? Is debt settlement as easy as they make it out to be? Are there other potential myths and pitfalls that you need to learn about?

With those questions in mind, we will provide information about the biggest credit card debt settling myths permeating the financial world. After you learn this valid info, you’ll have enough knowledge to decide if credit card debt settlement is the best way to go based on your specific needs.

According to, a website sharing info on credit card debt settlement options, “If you’re already behind on your credit card payments, now is the time to consider the benefits of debt settlement.”

Debt Settlement Myth #1: Everyone Can Cut Their Credit Card Balance in Half

In all honesty, when you deal with the most legitimate, best debt settlement companies, they are going to prequalify you ahead of time. They will need to learn about your financial hardship in order to discover if you are the ideal candidate for a debt settlement.

As an example, you could have potentially gone through a divorce, suffered from a medical problem, or have recently lost your job or experienced a pay cut. And when these situations arise in life, your debt may get the best of you through no real fault of your own.

In situations like this, it’s often common for people to start taking out more credit to pay for their current credit. And the cycle spirals out of control until a major financial hardship occurs.

So, a lender is going to take the time to discover if you have a real financial difficulty. If they find out that you’re only trying to scam the system because you don’t want to pay your bills, you’re obviously not going to qualify and you’re going to get rejected for debt settlement.

Debt Settlement Myth #2: Debt Settlement Companies Require Their Payment Upfront

The great thing about debt settlement companies is that you’re hiring an experienced negotiator to work on your behalf. While it is certainly possible that you can accomplish debt settlement on your own, it’s not necessarily advisable.

As Abraham Lincoln said, “He who represents himself has a fool for a client.” And this holds true for debt settlement as well. Because you may feel that nobody is ever going to work harder than you, but if you do not have the skills needed to get the negotiations done, all the hard work in the world isn’t, even going to matter.

Plus, the common myth is that you’re required to pay for debt settlement services upfront. But the actual truth is that it’s against the law for a debt settlement company to collect payment in advance based on a rule from the Federal Trade Commission that came into effect in October 2010.

So, if a so-called debt settlement company tries to charge you an exorbitant amount of money upfront, do yourself a favor and run for the hills because it’s a scam organization looking the hustle you out of your hard-earned cash.

Debt Settlement Myth #3: Debt Settlement Doesn’t Have a Negative Effect on a Credit Score

Unfortunately for everyone, this is far from the truth.

Debt settlement will negatively affect your credit score, and it’s going to hurt it almost as much as bankruptcy. But sometimes you have no choice but to live with it if you want to get out of debt. So it’s a worthy trade-off in our expert opinion.


Clearly, there are a number of debt settlement myths permeating the financial world. But at least now you’ve finally learned the truth.

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