Credit cards let both unemployed and employed individuals manage cash flow and survive times of financial hardship. However, the price for this convenience is debt. Often, when coupled with proper debt management techniques such as budgeting and expense tracking, contacting your credit card company reduces the credit card debt you have. When you contact credit card companies to reduce debt, approach the credit card company with the right data and attitude. Otherwise, the credit card company may be less willing to work with you.
Level of Management
When you call your credit card company, ask to speak with someone who has the authority to make major alterations to your account. If your write a letter, always address it to that authority. Often, the typical customer service representative doesn't have this ability, although he can review the account and make modest changes like correcting charges for purchases not made or adding a user to the card.
Presentation of Problem
Explain to the authority why you cannot make your payments. For example, you might indicate that you were laid off temporarily or that you had unexpected medical bills, if applicable. The data you provide here establishes the grounds for whatever request you make for the account, such as lower monthly minimums or settlement on some of the debt. Give the representative concrete figures and dates, if possible.
Solution to the Problem
Credit card companies often are willing to negotiate with you to reduce your debt if you can present them with a workable solution to the problem you present. Tell the representative an exact figure for what you can pay -- if you're looking to settle, offer to pay 15 to 25 percent of the total debt, as the Need Help Paying Bills website recommends. Because credit card companies will want you to pay more, an offer of 15 to 25 percent provides plenty of room for negotiation. Indicate how long it will take to repay the debt via the presented method, whether you plan to pay in a lump sum or in installments, where you will get the money to repay the debt and the payment methods you have available to use (e.g., electronic payment from a bank account, money order, check). The idea is to start negotiations with your ideal terms and then let the credit card company modify your plans based on their policies and procedures as needed.
Disadvantage Reminders
If you are a loyal customer who has had decent credit and payment history, remind the company representative of this and present evidence such as previous statement data and your credit score -- in writing -- to support your assertion. Remind the representative of the disadvantages to alternatives to your proposed solutions, such as the expense the company will incur if they sue you. Spin this in a positive light and don't be accusing. For instance, you might say "I'm really looking to preserve my credit rating, and settling means you don't have to spend money on collections or a lawsuit, so I propose...", rather than "I've had my account for x years -- I deserve to have some of the debt forgiven because you don't give me any other perks."
Quotes from Other Companies
Credit card companies don't want to lose business to other credit card companies. They understand that they'll look like the "bad guy" of the field if they deny a request that is within reasonable market standards (15 to 25 percent above the initial settlement offer). Most companies don't like to be in this position and therefore will extend negotiations if you politely present information that shows what other companies have done in situations similar to yours. You can get this information simply by requesting it from the delinquent accounts departments of credit card companies, or by contacting attorneys who specialize in debt collections. Presenting this information shows that you have done your homework and know your entitlements, even if those entitlements are not especially high. In the worst-case scenario, you can use your quotes as an ultimatum, telling the credit card company you're prepared to cancel the card if they can't meet your clearly reasonable terms. Companies often don't want you to cancel the card because it is less expensive to retain a card holder than to find a new one, and because they can make money from keeping you as a client with a higher interest rate.
Compliments
Companies by themselves may not respond to flattery, but the workers in companies do. Tell the company if you were impressed with service you've received or how you don't want to lose privileges with the company considering the reputation and rankings the company has -- list positive card features they provided to you, and if possible, name specific representatives that have helped you in the past to make the conversation and requests seem more personal. Add that helping customers through hard times is one more way the company can distinguish itself.
Final Words
Regardless of what you say to your representative, keep your language concise and professional, even if the service representatives provide nightmarish help. Always get the name of the representative with whom you speak if using the phone, and get negotiated points in writing via a formal letter or email before you take any other action.
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