How to Negotiate with a Credit Card Company


Attractive woman holding a credit card in her hand and talking on the phone | Financial Freedom Advocates

How to Negotiate with a Credit Card Company

Falling into credit card debt is never a pleasant situation. Today, more and more Americans are racking up large credit card balances as they resort to credit in order to pay bills and purchase necessities. In the past, credit cards tended to be used on emergency items, or in some cases for luxuries because doing so was more convenient than having cash. Now, credit cards are used on a daily basis for small, everyday items; in many cases, Americans fall into credit card debt as a temporary solution because of a job loss or dip in income.

If you find yourself in over your head regarding a credit card debt, it’s important for you to understand that you have the option of negotiating with your credit card provider. Credit card companies may want you to think that you’re simply stuck with the full balance and need to scrape away indefinitely, but this isn’t the case.

In this post, we will discuss how you can negotiate with your credit card company to potentially settle your debt. This can be a highly useful strategy depending on your situation.

The Credit Card Company Wants Something vs. Nothing

Before we dive into the specifics of negotiation strategy, we should first point out that credit card companies are aware of how oppressive the burden of debt can be. These companies know that digging out of a large financial hole is not an easy matter. For this reason, these companies know that if they remain overly rigid and inflexible they can risk receiving nothing, or very little.

Credit card debt is unsecured, and so if the debtor declares bankruptcy then the credit card providers are often out of luck. Credit card companies operate on high risk, high reward model: they charge high interest and heavy fees, but then they are often left without recourse if someone cannot pay off a large balance.

Lump Sum Settlement

Depending on your circumstances, you can try to negotiate a lump sum settlement with your credit card company. This will involve making a one-time payment that is below the face value of your total credit card debt. This strategy has a high success rate, because companies prefer to receive a single large payment on the balance, even if it’s not the full amount owed.

Payment Plan Settlement

Alternatively, credit card companies may also be willing to develop a payment plan settlement agreement to take care of the debt. This may be a desirable arrangement if you are still employed, and receive a steady income, but prefer to pay over a certain timeline. The payment plan settlement can not only spread out your repayment, it can also lower your total debt. In other words, you can negotiate a lower total amount owed to the company, and also spread the payments on the newly agreed amount across a certain timeframe. This tends to be a highly attractive option, although many debtors prefer to make a single lump payment instead. Plus, credit card companies will tend to negotiate tougher with payment plans than lump sum payments.

Commit Everything to Writing

A key piece of advice is to make certain that all agreements are committed to writing. This cannot be impressed firmly enough. If you reach a settlement agreement with your company, be sure to finalize that agreement in a written document which is then signed by both you and the company. If you don’t get something in writing, you run the risk of having the agreement collapse under judicial scrutiny.

Hire an Attorney as Necessary

Remember, you have quite a bit of leverage when it comes to negotiating with your company. This is because the company ultimately wants to receive something rather than nothing. Another thing you need to keep in mind is that having an attorney in this situation can be extremely valuable. The fact is that credit card companies tend to be a lot more malleable when you have an attorney working on your behalf. If you’d like more information or need immediate assistance with a case, give Financial Freedom Advocates a call today at 786-668-6688.


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