Tips on How to Negotiate Your Credit Card Debt

Advice on how to successfully negotiate credit card debt.

Credit card debt continues to rise. According to recent Federal Reserve data, revolving consumer credit increased at an annual rate of 2%. Non-revolving credit increased by more than 7%. Here’s the good news: if you’re struggling to pay down credit card debt, you can negotiate more favorable terms.

Ask for a payment plan . Some consumers don’t realize that many credit card companies offer hardship payment plans. These plans come in handy if you’ve experienced a significant financial setback such as job loss or divorce. A hardship agreement will allow you to make lower monthly payments. Also, some creditors will lower or suspend your monthly interest rate while you’re participating in the plan. However, there are some pros and cons to these plans. Read more here.

Examine your credit report. It’s possible to be harassed for debt you don’t even owe. Take an active role in managing your credit by reviewing your credit report for errors. Some common mistakes include listings of debts that have been paid off but are still showing as outstanding.

Document everything. Make sure to write down the names of everyone you speak to, what was said, and the dates and times of each interaction.

Do’s and Don’ts:

  • DO take the lead. If you know in advance that you’re about to lose your job or you’re planning to get divorced, reach out to your creditors right away. 
  • DON’T be rude. Emotions can run high when you’re dealing with credit and debt issues. If a credit-card representative gives you a hard time, take a deep breath, politely end the call, and try back later with someone different.
  • DO be patient. If you’re planning to ask for an interest-rate reduction, it will likely take some time before this request is granted. Most credit card companies require at least one year of on-time, in-full payments before they will take your request into consideration.
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