Negotiating Credit Card Debt

If you are having trouble making your credit card payments, you might try negotiating credit card debt balance on your card.

Almost everything in the financial world can be negotiated. In fact, in business debt negotiation  is an every day  fact of life. This is especially true when dealing with an unsecured debt or loan like a credit card balance. Credit card companies want to be paid, to be sure. But they would much rather negotiate and get as much money as they can than to not get any at all. In addition, many times the credit card companies actually come out ahead if the borrower pays for a longer period of time.

You can negotiate various things. If you are not really that deep into debt yet, but are simply having trouble making the minimum monthly payments, then a good thing to negotiate is the interest rate. The amount of money you pay per month on a card which has a 19% annual interest rate can be substantially higher than that on a 10% card. In addition, it will take you longer to pay off the balance on a card with 19% interest.

Most companies are more than willing to give you a lower rate if you are a good customer because they fear of losing you to another credit card company.

A second thing that you can negotiate with the card companies is the elimination of late fees. Many companies have been increasingly using tactics like these in the past four years and treating them as a profit center. Some companies have even been caught purposely delaying crediting the customers account so they can charge them the late fee. Some of these tactics have caught the attention of the U.S. Congress as well as some of the larger media companies. As a result, some companies will waive some of the penalty fees if you make the request.

Negotiating Credit Card Write-offs

Sometimes, due to a loss of a job or huge medical bills, a family will get so far behind in their bills that they will miss many payments over the course of the year. If the prospects look dim for you catching up, you can negotiate with the credit card company to pay them a lump sum to dismiss the debt. In essence, they are writing off your debt in their book. They would be willing to do this because their alternative is to send your account to a collection agency in which they would only get a portion of the money collected anyway - and most likely a smaller portion than they would get from you. The thing to remember with this method, however, is that this will go on your credit report and will definitely decrease your credit rating.

Negotiation is a fact of life in many countries. In the U.S., however, it's a rarity when people use it. The most important thing in negotiating is to remember to keep in touch with your creditors and, as much as possible, try to remain on good terms. This gives you the best chance of successfully negotiating your way out of your credit card debt.

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