How to Negotiate a One-Time Credit Card Payoff

You may be able to negotiate a one-time payoff of your credit card account, if the card company or debt collector agrees. On its website, the Federal Trade Commission (FTC) refers to the practice as debt negotiation, although it is commonly known as debt settlement. The process is used to resolve seriously delinquent unsecured debt, including credit cards. The FTC reports that creditors are not obligated to accept debt negotiation, but may agree so that at least a portion of the debt may be satisfied.

Instructions

1

Review your most recent billing statement to confirm that your account is seriously delinquent. SmartMoney.com reports that credit card companies won't negotiate a payoff until you are at least three months behind in payments.

2

Call your credit card company using the customer service number on the back of your card or on your billing statement. Ask to be transferred to the department responsible for negotiating debt settlement agreements. The customer service representative may be authorized to negotiate with you. You may be transferred to the collections department, also known as "recovery," according to the MSN Money website. Tell the representative why you have fallen behind and that you would like to resolve the issue by making a lump-sum payment for less than the full amount of the overall balance.

3

Offer a lump-sum payment of 20 percent of the balance. That's a rock-bottom offer, according to SmartMoney, but will provide you with some negotiating room if the card company makes a counteroffer. SmartMoney reports that card companies will typically settle for 20 to 75 percent of the balance. It's up to the company to decide what it is willing to accept. The FTC reports that if you fall six months behind the creditor will consider your account written off. That is an internal accounting term but it will not end your responsibility for the debt. You may be able to negotiate even after your account has been written off as a loss. Continue your negotiations with the card company until you have a deal, even if means calling back multiple times. Alternatively, you can obtain a contact name and address and continue the discussions through written correspondence.

4

Get the terms of the agreement in writing before making your lump-sum payment. The agreement should specify the amount to settle the account and the due date. Pay the lump sum by the due date.