Negotiating credit card debt–how can you do it? Do credit card companies really negotiate with cardholders? Can you actually lower your debt by haggling with a credit card company?
Negotiating Credit Card Debt: Introduction
Many people get into more debt than they can handle using their credit cards. For some, it may be the temptation of having the money to spend even if they do not need it, and for others, it may be that hard financial times have fallen on their shoulders. The debt remains, and it is not going anywhere. Do credit card companies understand when their customers get into these financial situations? There is only one way to find out. Cardholders must ask the credit card companies to determine their options.
Why You Should Negotiation with Credit Card Companies
Negotiating with credit card companies helps cardholders to protect their credit card accounts. They want their customers to continue to do business with them because they continue to make money when cardholders charge on credit cards. Creditors do not want to go through the hassle of suing customers and spending an abundance of time and money pursuing payments from cardholders. Creditors do not necessarily volunteer the information to cardholders unless they ask. Each credit card company offers their own negotiating options to help cardholders regain their financial stability.
Another reason to negotiate with the credit card companies is to preserve credit history. Credit history contributes to 15% of the credit score. An old account that may be boosting cardholders’ credit scores may hurt them if the account is closed and charged off for non-payment. Making every possible attempt to preserve this account is extremely beneficial to cardholders.
Cardholder can negotiate their debts by contacting the creditor to see what options are available. The credit card companies generally ask a series of questions to cardholders to determine their personal need. What the creditors offer one customer may be very different from what they offer another customer. Creditors may factor in credit history with the company, the length of time that the account has been open, the amount of credit card debt, and other financial aspects. Cardholders must be honest with the agents so that the best options that meet their needs are offered.
Possible options may include lower payments, deferred payments, and lower interest rates. Cardholders must prove their willingness to work with the credit card companies so that they can receive the assistance that they need. Do not avoid the creditors when they call, or they will assume that cardholders do not intend to pay off their debts.
Tips on Negotiating Credit Card Terms
- Make sure to be pleasant to the customer service representative. If cardholders want to increase their chances of negotiating their credit card terms, it may be a good idea to be nice to the agent. Using a hostile tone of voice may decrease the chances of receiving any help.
- Persist until the desired terms are offered. The process may take a long time. Cardholders may have to wait on the telephone for 20 minutes before speaking to a representative, or they way get transferred a dozen times before they speak to someone who can help them. Hang in there until the terms are negotiated.
- Shop around to see what the going rates are for credit cards. Cardholders may have gotten a higher interest rate when the credit card accounts were opened. It may be possible that they are paying double the interest that other cardholders are currently paying.
- Cardholders should know their current credit score. Having good or excellent credit may dramatically reduce the interest rates that cardholders are currently paying. Cardholders should get the creditors to pull their credit after they know what their current credit scores are.
- Cardholders must be flexible with the creditors. Start by finding out what they have to offer. They may not offer cardholders the terms that they want, but the creditors may be willing to offer no interest for a few months, no annual fees, or some other beneficial option.
- Ask the creditors for a higher credit limit. Cardholders may reduce credit scores by raising the credit limit and lowering the monthly payment. This can buy cardholders some extra time until other options become available.
- Ask the creditor to eliminate additional fees temporarily. Lat fees, annual fees, and over-the-limit-fees may reduce cardholders’ credit card debt significantly. The credit card company may offer a repayment option until the cardholders get back on their feet.
Know that options are available to assist customers who need to negotiate credit card debt. Asking about repayment options is the only way to know if negotiations are possible. Don’t give up easily if creditors are not flexible at first.