Negotiate Credit Card Debt
If you’re buried under a mountain of credit card debt and are barely able to make your minimum payments, it’s time to take action. Namely, it’s time for you to start looking into ways to negotiate credit card debt to see how you can get better payment terms. Depending on your financial situation, you might either try getting a settlement, or you can negotiate better payment terms, including waiving late fees and other punitive fees.
Credit Card Debt Settlement
When trying to settle your credit card debt, what you’re trying to do is typically this: you call your creditors and offer to pay off part of your debt in exchange for them forgiving the difference. For example, if you owe $10,000, you can offer to pay $6,000; if your creditors agree to it, the remaining $4,000 is written off their books. You have to understand that every issuer has their own policy when it comes to settling debt and the terms that you get will vary, yet most of them will try and accommodate you.
Why? Because if you’re trying to negotiate a settlement, that’s because you’re near the breaking point and there’s a strong chance that soon they won’t be receiving any money from you. Even worse, you might file for bankruptcy, and since credit card debt is unsecured, they’ll be guaranteed not to receive anything at all. So the logic behind accepting a settlement that’s lower than what you owe them is that it’s better to get a percentage of something than 100% of nothing.
There are two drawbacks to settling your credit card debt, though. First of all, when you settle, your creditors expect to get paid immediately. What this means is that you can’t ask for a settlement if you don’t have the money ready to make your lump payment. This option is best for people who have savings or some other way of coming up with the necessary payment. The second drawback is one that most people don’t know, and get shocked when it hits them: the portion of your debt that is forgiven is treated as regular income, and as such you will have to pay tax on it.
Negotiating Better Payment Terms
If settling your credit card debt is not an option (and quite frankly, not many people have that luxury), you can try and negotiate credit card debt to better payment terms. If you have been a good customer, meaning that you’ve been paying your bill on time with few late payments, you should not have any problems negotiating a lower interest rate, which will lower your monthly payment. Even if you’ve been unable to keep up with your payments, it’s worth making a phone call to see if there’s anything that can be done about it. You won’t know until you try, plus it’s free to ask.
You can request that the various fees that have been charged to your account be waived, especially the late payment fees. While some companies will flat out refuse to waive them, some others will reconsider.
You also have the option of negotiating a payment plan, although the way this works with most companies is kind of counter-intuitive. If you have been making your payments on time, most of the time they will refuse to negotiate a payment plan with you. On the other hand, if your account shows that you’re several payments late and are in seriously bad financial shape, you’ll find that they’ll be much more willing to arrange a repayment plan that suits you better. Once again, it’s better to receive some money over time than no money at all.
Finally, there’s the option of turning to a professional to work out a deal on your behalf if you feel like you won’t be able to negotiate credit card debt in an effective manner. There are many resources that are available to you, both online and off. The main thing with this option is to make sure that you’re dealing with a reputable, legitimate company that will actually help you instead of putting you in a situation where you’re worse off than when you hired them.
Care One Credit is a debt relief service provider with a difference. They avoid the "one size fits all" approach you'll find in so many debt consolidation programs. Instead, they work to provide flexible, effective debt relief options for consumers who are struggling with credit card and other debt. The credit counseling services, resources and tools they offer are designed to help you pay down your debt, change the way you look at credit, and develop solid money management skills. So don't hesitate to contact them to negotiate credit card debt.Features and Bonuses:
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