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Can You Negotiate with Your Credit Card Company?

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If you have more credit card debt than you can handle, it may be possible to negotiate a deal with your credit
card company.

Debt consolidation, debt management, credit counseling, bankruptcy, credit cards, home equity loan, line of
credit, interest rates, free credit report

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The average American household has nearly $10,000 in credit card debt, and many people are only able to
make the minimum payment of 2% of the balance. Even 2% is $200, and by paying the minimum payment,
you could be paying on the balance for decades before you finally pay it off. Since new legislation will
make it more difficult to file for bankruptcy, it may occur to savvy debtors to try to negotiate a better deal
with their credit card company in order to make it easier to pay off the balance. Is this possible?

It might be possible, depending on your credit history, interest rate, and current balance. Your best bet,
especially if you have a history of paying on time, is to simply call your credit card company and ask if they
will lower your interest rate. They might, especially if you tell them that you got a better offer from another
bank. If you have a history of paying late, however, they probably will not be willing to lower your interest
rate. That's unfortunate, since paying late has probably prompted the credit card company to raise your
interest rate in the first place. Still, it's worth a phone call; you may get lucky.

If you've been paying your bills on time, asking for a lower interest rate may be the only option available to
you. The credit card companies aren't going to be too sympathetic to your financial woes if they're receiving
payment on time. On the other hand, if you're late on your payments, especially if you're more than three
months behind, you may have some negotiating leverage. That leverage comes with a few strings attached,
however. You may be able to negotiate a lump-sum settlement for your outstanding balance, where the
credit card company accepts a portion of your debt and writes off the rest. They're often willing to do this
instead of turning your debt over to a collection agency, as it's cheaper just to settle. The settlement amount
will vary, depending on your interest rate, your balance and your payment history. This type of settlement
comes with a couple of problems of its own, though. What if you don't have the money to settle all at once?
If you can't pay your bills on time, you probably don't have the cash to settle at once. Additionally, the
amount of your debt that gets written off will show up on your credit report as bad debt, and that will stay
there for seven years.

Your credit card company may or may not be willing to work out a payment plan, but it costs you nothing to
ask them, and negotiating a settlement with them may be cheaper for you than if you consult with a debt
consolidation firm. If your credit card debt is substantial and you just can't make the payments, it's worth a

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