How To Negotiate Credit Card Debt?

Contrary to popular belief, credit card debt is not the end of the world. Having said as much, there is no denying the fact that things will get a little tensed and you will have to be very provocative to set them right. Credit card debt is extremely common in the present Drowning in Debtday and age and the worst part is that you might not even realize that you are under debt until its a little too late.

Having said that, it is possible to negotiate bad credit card debt with your respective bank. It might come as a surprise to you but most of the credit card providers are willing to initiate negotiations and settlements related to such forms of debt. The truth is that a majority of their customers face this problem and they simply have to deal with it in a practical manner.

How to negotiate credit card debt?

1. Before you start calling your bank, understand how the procedure normally works. Typically, there are four kinds of solutions available for you. You can either opt for lump sum settlement wherein you can pay a certain portion of the debt in one go. This way, your debt will be reduced considerably. However, if you don’t have sufficient cash to avail this option, you can ask your bank to consider interest reduction or penalty fee waivers. Under normal circumstances, banks are quite willing to consider such requests.

If your current economic situation is rather unpleasant, you can opt for debt management program wherein you will receive professional counselling. Alternatively, you can also consider forbearance which will buy you some time to figure out your finances.

2. Once you have the basic information about the different options available to you, you should start thinking about your personal finances. At this point, you will need to take into account the amount of your debt, your current income, the size of your family etc. After going through the numbers, decide how much can you afford to pay every month or whether you can afford a lump sum payment.

3. After making a mental note of all these factors, you can go ahead and make the call. Truth be told, this is where the difficult part begins since you have to be really persistent with the credit card representatives. Every company trains some of their employees to deal specifically with such situations. Make it a point to ask for such representative as they will be in a better position to help you out.

4. While dealing with your bank, don’t hesitate before asking questions. At the same time, be candid about your current financial situation. You will have to be persistent if you want to manage your bad credit card debt.

5. The entire procedure can get tiresome and exhausting. In some cases, the bank might take a long time to respond to your requests or the plan of action suggested by them might not satisfy you completely. In such a scenario, be patient and ask them to reconsider your request. You might feel like a victim but you don’t have to agree to the first deal offered by them. Feel free to bargain and negotiate until you reach a realistic solution.

Finally, call your credit card provider as soon as you understand the seriousness of the situation. Remember, the earlier you deal with this, the better are your chances of striking a decent deal.

negotiate credit card debt

Elizabeth Roberts

Elizabeth Roberts

Liz Roberts and her team are continuously providing information to people who are ready to repair their credit and improve their credit score. Also NewHorizon.org team strives to empower the homebased and small business owners by bringing information that can help them to manage and grow their businesses. Let our 24+ years of business finance experience help you to get the financing you need! CONTACT US if need financing for your business.

6 Comments
  1. If you do a lump sum are the required or will they always lower the total? And if so whats the average? Like 50 cents on the dollar? I am wanting to package several debts into one lump sum and try to get one low interest loan.

    • It depends on the lender and age of the debt. When i was a bill collector I knew that any debt that was close to the 7 year limit for being on the clients credit report was almost worthless and we would take pennies on the dollars on those accounts since we know they only have to wait a little longer and the debt would fall off the report.

      The only exception to that rule was if we saw they were looking for a mortgage loan. If they needed to clean up their old debts in order to get their mortgage loan, we wouldn’t really negotiate.

      The fresher the debt the closer to full balance they will be. The older it is the more flexible they will become. Remember to get EVERYTHING in writing. DO NOT take their word for it! You will probably need this proof later on to prove to the credit bureaus that you had come to an agreement and paid according to that agreement.

      Good luck in your negotiations!

  2. What about all these places that say they can consolidate your debt and make it into one monthly payment? Seems strange to me as whats in it for that company? Are they legitimately just trying to help you out?

  3. A lot of times banks and other credit institutions will just cut their losses and give you a deal if you can’t pay. It’s unfortunate when anyone is in that position but sometimes it happens.

  4. Also, what about debt counseling companies who claim them can get your debt reduced? I’ve heard some are legit but some are scams and it’s hard to tell the difference.

  5. Thanks for this advice, Melanie. People don’t realize that creditors have short memories when reporting you to credit bureaus. ‘Get it in writing’ is gold.

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NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

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