If you are drowning in credit card debt, you may feel as if you will never get your head above water. You know that if you do nothing, things will never get better.
But what are your options? Can you negotiate credit card debt?
Yes! Depending on your situation, there are several ways that you can negotiate your credit card debt.
If your account is in good standing, you can simply call your credit card company and ask them to lower their rate. Many times, this is all it takes to get them to take 2%-4% off your interest rate. If they don’t seem willing initially and your credit is solid, you can hint that you are going to switch to another card and that will usually do the trick. You will be surprised how quickly a lower interest rate can help you pay of your debts.
If you have been struggling with payments, and have fallen behind, negotiating credit card debt actually gets easier. Why? Because while companies will lower your interest rate when you have been paying on time, they will almost never lower your monthly payment. If you are behind, they are typically happy to set up some sort of payment plan to help you get back on track. The best time to call is just before you are 30 days late. Because many (not all!) creditors will report your payments as on time when you are in a payment plan, this option can reduce your payments without impacting your credit.
If you are really far down on the account, a last resort is to negotiate credit card debt settlement. This is something you should only do with careful consideration. It will have a dramatic impact on your credit as the portion that you don’t pay will be reported to the credit bureaus as such. Debt Settlement can help you save between 40% and 60% of what you owe. Just be sure that you get any agreements in writing prior to making a payment. Some collectors will agree to things verbally and then not honor their agreement.
If you don’t feel comfortable negotiating on your own, Credit Counseling and Debt Counseling are other last resort options do deal with your debt problem. Here you are assigned counselors who know how to negotiate credit card debt. Like doing credit card debt negotiation on your own, working with a counseling service should only be done after careful consideration. Even if you just get the creditors to lower interest and fees as is done in credit counseling, the fact that you are in credit counseling is a major red flag on your credit report.
Be very careful of any company that offers debt counseling and settlement services that tries to collect large fees up front. Many of these companies will tell you they are “working” on getting your debt settled while doing nothing. It pays to do research and go with a reputable company. Going with a non-profit counseling service is usually the best idea.
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