credit card defaulter

Through this article we will tell you how to settle credit card? If you have not repaid your credit card outstanding amount and it has become too much for which you need to do credit card settlement, then you can easily know the complete process of doing credit card settlement through this article. Are.

Before we tell you how to do credit card settlement? It is also necessary to tell you what is credit card settlement? Also how much does a credit card settlement affect your credit score? We will provide you information about all this in this article.

What Is Credit Card Settlement?

Credit card settlement is a mutual agreement between a credit card holder and the credit card issuer. This agreement is entered into when the credit card holder finds it difficult to repay the outstanding amount of his credit card bill.

There can be many reasons for a credit card holder not being able to pay his credit card bill. The credit cardholder may be facing a financial emergency or may have been careless in using his credit card. The outstanding amount may increase with time and the interest charged on it may also increase.

Therefore, if the total outstanding amount is so much that the credit card holder is unable to pay, then credit card settlement is resorted to to solve this problem.

Thus if the credit card holder is not able to repay his credit card bill then there is an agreement between the credit card holder and the credit card issuer through which the credit card holder can be able to repay his outstanding amount. This is known as credit card settlement.

Under this, the credit card holder is given the option to either pay his outstanding amount in lump sum or pay a part of his outstanding amount to the credit card issuer and the remaining amount through some other option. Promise to repay.

credit card defaulter

Credit Card Settlement Process

You can easily make credit card settlement by following the steps given below-

  1. First of all, you have to contact your credit card issuer and tell them that you are not able to pay the outstanding amount on your credit card.
  2. You will then receive the credit card settlement form and provide brief details of why you have not been able to pay your credit card bills.
  3. You must also mention in your credit card settlement form that you are ready to pay the outstanding amount along with other repayment terms of the credit card issuer.
  4. You can then offer a lump sum payment to your credit card issuer to clear your outstanding balance or even file for bankruptcy if you are not in a position to pay the lump sum.
  5. Your credit card settlement application may be accepted or rejected by the credit card issuer.
  6. If your credit card settlement application is accepted by the credit card issuer, the card issuer discusses with you all the possible ways through which you can clear your outstanding amount and opts for any one of them. By opting in you are given the opportunity to pay the outstanding amount.

Does Credit Card Settlement Affect Credit Score?

A credit card settlement directly affects your credit score. If you apply for credit card settlement, it means that you do not pay your credit card bills on time and you use your credit card irresponsibly.

This creates an image of you as a defaulter which lowers your credit score. With a low credit score, you face a lot of difficulties in getting other loans in future. Even if you get a loan, you have to pay a higher interest rate.

So a credit card settlement serves to lower your credit score. Therefore, you should try to pay your credit card bills on time so that a situation like credit card settlement does not arise.

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