Negotiating Credit Card Debt

Now that you are fixing your credit is a good idea to negotiate your credit card debt. Depending on your situation this task might be easy or a little bit hard. The idea is to reduce your credit card debt, reduce the APR, even if it’s for a little while and improving your credit.

How negotiating my credit card will affect my credit? In simple words you want your debt to limit to be under 50%. So if you have 10,000 on your credit card limit, you want to make sure that you balance is less than $5,000.

Negotiation tools

A big misconception that us consumers have is that, when we negotiate with a credit card company, or any other lending institution for that matter, we want to tell them that we are not able to pay are bills, therefore they have to help us lowering the monthly due or the APR. For instance, if a make $2,000 a month, I would tell the customer service rep, that I have bills totaling $1,900, therefore I only have $100 bucks to shed. But it does not work that way.

Things to consider when negotiating your credit card debt.

Make sure you live enough room on your expenses, in other words if you make 2K, you want to make sure that you tell the credit card company that your expenses is no more than $1,500. That way there is plenty of room for wiggle.

Let them know how much you can commit every month. The more you tell them you can pay, the more your APR will be. So start in the lower end, say $75 bucks a month, but you don’t want to go to low, otherwise they will turn you away.

Give solid answers. Don’t say maybe or I think, make sure when you call them you have definitive answers.

Long Term versus Short Term

Your credit card company will probably have options for long and short term payment plans, you just have to decide which one will be better for you.

For accounts already closed.

If you account is already closed then see what options your credit card company have for settlements. How to credit card debt? The best way is to contact your Credit card company and see what is their bottom line, in other words what is the lowest amount they are offering you to settle for.

Besides settlement, they will have other payment plans options, long and short term. Even though your account is closed and by entering an agreement with your credit card company they will likely closed your account forever, you still winning by entering a payment plan. They will report to the credit bureau as paying as agreed, and you will have lower APR and payments. Most companies will suspend future late and over limit fees, but very few will go back to cancel some of the fees that were assessed to your account in the past.