Credit Card Debt Negotiation

Negotiating With Your Credit Card Company To Reduce Debt

Overview

If you find yourself struggling to make the payments to your credit card company each month, or even if you feel the payments are too high, you should talk to your creditors about ways to reduce your debt, such as reduced interest rates or switching to a lower interest rate card.

If you have a good payment history with the card company, many will be willing to work with you, especially if you are experiencing unexpected financial problems through factors such as illness or job loss.

If you have extra cash available, many card companies will waive most, if not all, of the accrued interest charges in return for you paying the balance in full and agreeing not to incur further debt on that card.

This settlement is beneficial to both sides. The company collects the real debt and avoids the costs of collection attempts. You benefit because your credit record will show a debt repaid in full.

New Company, New Guidelines

Each credit card company has its own established guidelines for credit card debt negotiation and they vary widely from company to company. These guidelines can also be amended at the discretion of the company’s loan officers. If your initial attempt to negotiate your debt fails, ask to speak to that person’s supervisor. Work your way up the chain of command until you reach someone in authority.

If you cannot work out a compromise on your own, a debt counseling service might be of some help. These companies have established a sound business relationship with most major credit card companies and are in a better position to negotiate than an individual.

Some companies offer debt counseling as a free service and others require payment from the individual seeking debt relief. Check with the Better Business Bureau before signing with any debt counseling service.

The worst thing you can do is ignore your debt. Many companies will offer to waive a month’s payment to a customer in good standing without incurring extra interest charges. Talk to the company as soon as you realize you might have a problem meeting a payment rather than letting them call you.

Credit card debt negotiations go much better when you are completely open and candid with the credit card company.