How to Cancel Credit Card Debt Based on Income

If your credit card debt is spiraling out of control, know that you are not alone. IndexCreditCards.com reports that the average household credit card debt stood at more than $7,800 in the middle of 2009. Cardholders, though, can find relief by working with their credit card companies. A 2009 story in the Washington Post said that credit card companies are more willing to negotiate with cardholders who are struggling to make the minimum monthly payments on their cards. Credit companies are even willing to reduce or cancel credit card debt when cardholders are facing serious financial difficulties.

Instructions

1

Compile the financial paperwork you will need to prove to your credit card company that you do not have the financial resources to pay your monthly minimum credit card payment. These papers include copies of your two most recent paychecks; copies of your credit card statements (from all of your cards); copies of your other loan statements, including student and car loans; and a copy of your most recent federal income tax return.

2

Call your card issuer at the number listed at the top of your most recent credit card statement. Ask to speak to a supervisor. Tell this person that you are struggling to pay your minimum monthly payment because of a financial hardship. Ask for a cancellation or reduction of your credit card debt.

3

Explain your hardship. If you have lost your job, seen your annual income plummet or suffered a serious illness or injury that has limited your earning power, mention it.

4

Write a hardship letter if your credit card company requests one. This letter will put in writing the financial difficulties you are experiencing. Make the letter clear and direct: State your financial hardship. Then explain how it is making it impossible for you to pay your minimum monthly credit card payment.

5

Send to your credit card company by fax, mail or e-mail the paperwork you compiled in Step 1 and your hardship letter.

6

Wait for a decision by your credit card company. If your financial hardship is severe enough, your credit card company might agree to wipe out the money you owe them. In most cases, though, the company is likely to provide some other form of relief: It might cancel part of your debt. It might lower your interest rate. It might give you several months off from making your payments.