Quickly Decrease Credit Card Debt With Risk Management Techniques

In business, there is a simple practice that is used when making important decisions that can minimize any potential negative outcomes of big decisions. This is referred to commonly as risk management. You can easily apply this to your own financial decisions as well. In this article, you'll learn how to apply simple risk management strategies to keep from going into credit card debt. Credit card debt is a big destroyer of personal financial freedom and happiness, and this is one technique to avoid it altogether.

The first basic step of risk management comes before taking action. It involved thinking of the worst possible thing that could happen should you go through with your decision. In this particular case, the best time to make a decision is before making a purchase. If you consistently stop and make some conscious choices before buying things on credit, you'll find it much easier to stay out of debt.

In this case then, what is the worst that can happen? You buy the item, the bill comes a few weeks later, and you don't have any money. You can barely make the minimum payment if that. What happens then? You continue to make the minimum payment for several months. The interest compounds, and you will likely pay at least three or four times the original price of whatever it is you are considering buying.

After you've determined the worst possible outcome, next you've got to determine how likely it is to happen. A great way to do this is to look at your recent payment history. If you usually pay off all or most of your balance every month, then you've got nothing to worry about. But if you usually struggle to just make the minimum payment, then you will likely do so in a few weeks when the bill comes due.

Once you've figured out the worst possible outcome, along with the likelihood of it taking place, the next step is to try and minimize it from happening. In most cases, this is simply to not make the purchase. Of course, this is much easier said than done. One trick is to think about it over night, and if you still want or need to buy it in a day or two, then go ahead and make the purchase. Another possibility is to pay cash for the item. If this isn't possible, then you can move on to the next step.

The next step is to prepare for the worst possible outcome. In this case, buying something that you'll end up paying three or four times the amount of, since you will likely be paying the minimum payment on your next bill. Take a good look at the item you're considering. Imagine paying three or four times and amount. Is it really worth it? If you think it is, then go ahead and make the purchase. If it isn't, then congratulations. You've just saved yourself some money.

With operational risk management software you can dramatically minimize your risks, and maximize your profits. So head on over to the operational risk management software page today.
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How do I settle my own credit card debt?

I attempted to settle my own credit card debt, but all credit cards refuse to settle. They would rather wait until I'm 90 days late, charge it off or sell it to an agency and have me settle with them.
Any clues on how I can buy my own debt at 12 cents on the dollar like the credit collection agencies do?

Answer
There is no way an original creditor will settle or sell a debt that isn't even 90 days late for only .12 cents on the dollar.

That price would be for very old charged off accounts, not accounts that haven't even been charged off yet.

If that is the price you are requesting they settle for, it's no wonder they aren't willing to deal with you.
If you aren't even 90 days late yet and you want to settle the account (which will harm your scores worse than the lates already are) you will probably have to offer near to the full amount (you also might be able to get them to drop the interest that was charge after the date that you stopped paying)

Then, they will probably file a 1099 on you for the forgiven amount for taxes, which you would have to file as income

Since you aren't 90 days late yet, instead of trying to settle, you should try and get them to work with you in bringing the account current. See if they will lower the interest rate until you are current.

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