Negotiate Credit Card Debt With Smart Strategies

negotiate credit card debt

Negotiating credit card debt was once unheard of but, with the recent economic upheaval, it's no wonder that so many people are in over their heads with debt. Most of the debt that has gotten out of control is unsecured. The main culprit, of course, is credit cards. When the money was flowing, the amount that was being carried by the average consumer seemed manageable. Now that jobs are scarce and people are scared, the debt has become a monster that is eating many families alive. The good news is that you can negotiate credit card debt.

This isn't a magic pill, but it can get you out of a tough spot if you use it correctly.

Many people turn to a credit counseling agency when they want to negotiate credit card debt. While these companies can offer help, there is also a lot of risk involved. Many companies claim to be able to negotiate better rates with your creditors. They often take the payments themselves, keeping their fee before forwarding the balance to your credit card company. That's how it works when they are doing what they claim. However, many clients have found themselves out in the cold when they realized that none of the payment was actually getting where it belonged. Be extra cautious when using a credit counseling service. Check references religiously and always keep in touch with your creditors to make sure that payments are being received. Experts advise using a non profit agency for the lowest chance of fraud.

The fact that so many people are in over their heads gives consumers a lot of negotiating power with creditors. While you can get relief using a counseling agency, most people don't realize that you can actually get comparable results if you negotiate credit card debt yourself. In fact, because you aren't paying a fee to the middle man, you can come out ahead.

"Creditors have better memories than debtors."

~Benjamin Franklin

negotiating credit card debt

There are several things that your credit card company may be willing to do for you, but you have to be insistent and persistent to get what you want. First, you should be able to lower your interest rate without too much hassle. You can also apply for a payment plan. You can even request the removal of all interest. Credit card companies with likely require the account to be frozen if this is approved.

Finally, if your account is already is arrears, you can start the process of negotiating a settlement. With most credit card companies, 40% is the magic number. It will probably take some commitment on your part to get this, but stick with it. Call back as many times as necessary and speak with supervisors. Don't be afraid to let them know that you are running out of options and are considering filing for bankruptcy. If that happens, your creditors get nothing, so use that as a negotiating point.

There is no magic bullet when it comes to fixing credit problems. Anytime that you are in this deep, there will be consequences. Even if you negotiate credit card debt, the resulting dings can remain on your credit report for up to seven years. In the meantime, you will have a hard time getting credit extended to you.

Only use these strategies if you have a long term plan, as you will likely be relying on cash and immediate resources for quite some time. If you still have the same poor management skills, you will end up right back here again. However, with proper planning, debt settlement can be a life saver, freeing up resources and allowing you to move forward. If you use a counseling service, check the references. However, you can often get just as much by doing the work yourself. Be persistent and keep asking until you get the results you need. Here's a solution.

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