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Can You Negotiate With Your Credit Card Company?

Credit card debt is regarded as unsecured debt, which means that the credit card companies cannot take your assets if you fail to pay the debt. Hence, most credit card companies tend to negotiate and reach a settlement so as to get back as much of the owed money as possible.

Presented below are the steps that you may take when negotiating with your credit card company.

  • If you have many credit cards, then go through the latest bills of each card and find out the total amount that you owe on each card. Find out the interest levied on each card. Write down the customer card numbers for each credit card company.
  • Understand what negotiation options are available and which ones are the best for you.
    • You may ask the credit card company to reduce the interest rate, decrease or waive the minimum monthly due, and eliminate past late payment fees.
    • If you are facing financial issues, then you may go for a hardship plan, wherein the credit card company may offer a structured payment plan and reduce the interest, fees, monthly minimums, and other charges.
    • You may go for a lump sum settlement. This means that you will pay a lump sum at one go and payout the debt. In this, the amount paid by a borrower as settlement is usually much lower than the total amount owed.
    • You may opt for the services of a debt settlement company or a debt management organization to help settle the credit card debt.
  • It may be noted that all of the above listed negotiation options come with varied drawbacks. You should know about all such downsides. For one, your credit score will be affected, depending on how the negotiation and the debt is reported by the credit card company to the credit bureaus. The credit line will be stopped by the company, which means that you can’t use its credit card anymore. Also, the debt that is forgiven is regarded as taxable income.
  • Once you have made a choice that is right for you, you may call the credit card company and begin the negotiation. If you have opted for the services of a debt settlement company, then they will do the negotiation and you do not have to directly contact the credit card customer service. A debt settlement company will charge fees for their services. As you may already be financially stressed, it is a better option to instead negotiate on your own and avoid the services of a debt settlement company.
  • Keep a script ready with you that you can refer to when negotiation with the credit card settlement department. Document the designations and names of all the people that you have a conversation with. Let them know about your financial situation and be persistent about what you want to be done.
  • After you have reached a negotiated agreement on the payments, ensure that all the terms of that agreement are given to you in writing.

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