Sometimes, you are deeply drenched in the debt of your credit card bill payments. Credit cards such as Discover, American Express, and other credit cards usually have interest rates that are charged if you defer on the bill payments and unpaid transactions. The burden of unpaid transactions along with the mounting interest due to the deferred payment of your credit card bill can take you to make drastic cuts in your monthly budget.
However, if you are in such a situation, there are many ways to get financial support. One of the ways of debt settlement is through debt settlement companies. These companies provide support to have an agreement with your credit card companies to settle your debt against your credit card.
The main mechanism of debt settlement through such companies is through escrow payments. The debt settlement is achieved by an agreement according to which the deferrer has to set up a fixed amount of savings in the escrow account of the debt settlement company that is arbitrating between the deferrer and the credit card issuing company. The total amount settled through the escrow payment is usually less than the amount that is payable by the deferrer to the credit card issuing company.
However, settling your credit card debt through this method also has some downsides. The escrow payment period is often very long, ranging up to 36 months. During this time, you have to set aside a significant portion of the savings until all the payment against the debt is completed. Moreover, these arbitrating companies also discourage sending the payments directly to the creditors, which has a negative impact on your credit report.