Credit Card Debt Negotiation Tips
Getting wrapped up in credit card debt is an all too common problem in this economic climate. You don’t have to stay in that quagmire, though, you can negotiate a way to settle your debt that works for you and the lender.
Contact your Credit Card Issuer
If your credit debt has exceeded your ability to pay, don’t let your bill go unpaid. Make a call to the card issuer immediately and ask to speak with a manager. Call before your miss any payments and they will be much more willing to work with you.
The problem with making this call is that the company may immediately freeze your card. Furthermore, some companies won’t deal with you until it is clear you have missed several payments.
Keep Expectations Realistic
No one is likely to cancel your entire debt, so, enter negotiations realistically. Let the company know that you are considering bankruptcy if you actually are. The fact is you have something they want; money.
Don’t accept their first offer, this is a negotiation, after all. Come to the table with an idea of what you want and how much you can manage. This sets the bar in the compromise you are seeking.
Which Option is Best for You
Three common ways that credit card companies address debt settlement are lump sum, workout arrangements and debt management programs.
In a lump-sum arrangement you pay off, in one large payment, a portion of the debt. The rest is forgiven. This works well if you have access to a reasonable amount of money but not enough to pay off the whole card.
A workout arrangement improves your terms and eliminates the worries of late fees and over-limit penalties. This option can help you avoid negative marks on your credit report. Make sure you get the card company to commit to leaving you a clean record, and get it in writing.
Debt management programs offer counselors which will help you to pool your debt so you can make one monthly payment while also reducing how much you owe to each lender. You will have to pay a monthly fee to use the service, but this is a viable option if you feel completely overwhelmed. Make sure you find an affiliate, reliable firm if you go this route.
Retain written notes of each conversation you have with your lenders. Get a name, employee number and call back number. Write down all the conditions offered and get the offer in writing before you start making payments.
Use certified mail for all written correspondence as you work through the process. Put copies of any letters you write in your file for safekeeping.
Once you have negotiated an agreement and have it in writing make sure you keep up with your new payments. There is light at the end of the tunnel.