In my previous article I showed you the difference between debt consolidation and debt negotiation (link opens in new window) and I assume that you are familiar with the unsecured nature of credit card debt by now. So what could you do if you are deep with credit card debt and feel you cannot repay it under the initial terms? Is it all lost and are you heading towards bankruptcy? Since credit card companies might be just as willing as you to reach a working agreement (and avoid incurring even more losses) there is a potential way out if you are able to apply a few tips for negotiating credit card debt. Read on to see what these are.
- Is your payment history pristine, no matter how hard it was for you to keep it that way? Then waste time no more – this is the moment to call your bank and ask for a lower interest rate – you know that history will not remain like this for long if you don’t do it. For obvious reasons, do no tell the credit card company WHY you are asking for a better rate, other than for your right as a reliable customer to get the best deal they can offer. Even if you haven’t been making payments on time, it’s worth a phone call to see whether you can adjust the interest rate slightly in your favor.
- Are they charging you fees for using ATMs, late payments or check payments? Ask them to waive the fees (especially if you have over 6 months with them) using other credit card offers available on the market as leverage (browse the Internet and make sure to compare apples to apples). Some companies operate on such tight margins or strict rules that they might not be willing to discuss the idea. If that is the case, revert to step 1 and try to squeeze more there if you have market reference on some more flexible lenders.
- Once you started running late with your payments, your credit card company might be interested to agree on a custom payment plan with you. It is also better to get back their money from you than not at all. If you take this route, be careful of temporary plans that are shutting off at a pre-arranged date. Forgetting about them might trigger another penalty for delayed payment in the future once the payment plan is over.
- Have some cash stashed aside and feel ready to try your hand doing some real debt negotiation? Offer to pay a lump sum of around 20-25% in exchange for settling the whole amount. It is of utmost importance to make sure that the representative you are talking to has the authority to approve such an arrangement prior to taking negotiations too far.
- Look for advice on credit issues. Most of the credit card debt negotiation companies will offer you a free evaluation (Internet form and phone conversation with one of their consultants) if your debt of over $5,000 or about that. It takes you only two minutes and the information might help you get a better deal – click here for one.
And the most important of all tips for negotiating credit card debt – get everything you agreed upon in written and signed by the credit card company representative. This is not only insurance, but proof that you are knowledgeable and willing to keep your end of the deal.
This is not the ultimate in negotiating credit card debt methods – I have only skimmed the surface to offer you a checklist of simple steps you can try in order to negotiate credit card debt down yourself. Dealing with your credit card debt can be beneficial to your credit score and part of a larger strategy to repair it. For a working method to repair your credit click here.
Related posts:
- Question About Savings Account Versus Credit Card Debt?
- Take The Money In Savings And Pay Off Credit Card Debt?
- Is It Smarter To Start A Savings Account Or Send Extra To Credit Card Debt?
- What is unsecured debt? The base definition of unsecured debt
- Pay Off Credit Card Or Put Incentive Check Into Savings?