Credit card stress

How to Best Negotiate With Your Credit Card Company

Young couple using computer for paying bills. They are having problems.

If you dread looking at your monthly credit card balance and are starting to feel that you simply can’t keep up with the financial burden of high interest rates, it might be time to start thinking about a solution.

According to experts, American consumers have an average credit card balance of around $5,500. Considering the fact that the average American income is around $60,000. Considering those numbers, it seems quite clear that many Americans dedicate a large percentage of their annual income to trying to pay off their credit cards.

But what happens when your credit card debt simply becomes too much to bear?

One great option at your disposal is to try to negotiate with your credit card companies in order to receive a more favorable interest rate. Because credit card companies behave much like unsecured loans, they may be more willing to find a rate that actually allows you to repay your debt rather than just watch your balance just continue to increase without any sign that you will actually be able to pay it off,.

If you are currently over your head in credit card debt, it might be time to hop on the phone the old fashioned way and get in touch with your credit card companies to find a workable solution and a workable rate.

If you’re not sure what you should do or where you should start, a good place is the rest of this article!

Know what you owe

A great place to start is to make sure you know exactly how much you owe when it comes to your credit card debt. If you have more than one credit cards, go through all of your statements and make a list of how much you owe on each card. You are also absolutely going to want to note their related interest rates.

It is also wise to write down the customer service contact numbers so that you can have all the preliminary information you need in one place. Now that you have all that ready, it’s time to buckle in!

Learn about what you can do

Another thing to do before you pick up the phone and call your credit card providers is to find out what specific options are available to you. Each option impacts your credit scores and several even have impacts on your taxes for the upcoming fiscal year, but if you are facing a credit card debt emergency, those issues might be something that you simply aren’t too worried about at the moment.

Here are the most population options at your disposal:

Debt settlement agreement

There are companies that you can get reach out to who will offer to help by negotiating with your credit card companies to get them to agree to a settlement. Typically, this settlement will operate as a lump sum payment that you make that is less than the total amount of your debt.

The way this usually works is by the customer paying the settlement company a monthly fee with a portion of that fee going towards their lump sum payment and another portion going to the company itself.

This option is a way to get your credit card debt off your mind, but you should only consider it a last resort.

Lump-sum settlement agreement

This option involves reaching out to your credit card company and negotiating to pay less than you owe. This option on really works if you have a lot of money on your own to pay off your credit card debt upfront. Even if it is less than you total balance, you may be better served just using it to strategically pay down your balance.

The reason for that is because while paying off your credit card debt could help improve your credit score, engaging in a lump-sum settlement will almost certainly damage your score.

Workout an agreement

With a workout agreement, you will have the opportunity to ask your credit card companies to do one or all of the following when it comes with your credit card debt to get out of it:

These actions will not only reduce your overall debt, but they will help you pay off your debt going forward. If you are expecting a raise at work, or expecting a large tax refund, this is a great way to make sure that you credit card debt does not get out of control in the meantime.

Call your credit card company

If you have decided to negotiate your credit card debt on your own behalf, it is time to contact your credit card providers and get the ball rolling.

First off, ask for the department that handles debt settlements or collections on your loan. You may even want to search online for a script so that you know exactly how to frame your request and what you are hoping to get as a result.

It is important to make sure to keep emotions out of it and to politely and calmly explain your financial situation and what you want out of the settlement. While you may initially be met with pushback, it is important to remain persistent until you get the outcome you are hoping for. It is possible, but you have to be willing to fight for it.

Make sure to get it in writing

If you have found a way to make headway with your credit card debt in terms of how to get out of it, whether it’s asking the right question or simply being connected to the right person at the credit card company who is willing to negotiate, it is important to make sure that you are getting everything that is agreed upon that is favorable to your situation written down. This is good advice that can come back to save you alot of money in the future. Write down who you spoke to, what time and date the call was made and what the summary of the call was. That way, if you need to refer to in future for legal reasons the credit card company can retrieve the recording to verify what you have said.

A verbal agreement you made is never set in stone. To protect yourself, make sure to get the logistics written out for your records.

In Conclusion

Having thousands of dollars of credit card debt can prove nearly impossible to overcome. However, there are several tactics that you can employ to do just that. Hopefully, the information in this article helps you begin your journey to a debt-free life.

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