Will Credit Card Companies Renegotiate?

Credit cards allow individuals to access lines of credits -- a maximum amount of money a person can borrow from a financial institution. Most credit cards charge the borrower a rate of interest if he does not pay back the money he borrowed promptly. In addition, if the person pays this money late, he may be charged additional fees. Sometimes, credit card companies are willing renegotiate the terms offered.

Credit Card Agreements

The terms attached to a credit card are secured through a written contract between the credit card company and the individual to whom it has issued the line of credit. This creates a legal obligation for the individual to pay the money he owes when he draws it from the line of credit. A credit card company, therefore, has no legal right to alter the terms of this agreement, but it may choose to.

Renegotiating Terms

Sometimes, a person may be able renegotiate terms of the line, such as its interest rate. Credit card companies may be willing to renegotiate for various reasons. For example, a person may have seen his credit rating improve, making him eligible for a lower rate. Or, the person may be unable to afford his current rate, and the company, wishing to keeping his as a customer, may be willing to change it.

Debt Settlement

According to the New York Times, in some cases, credit card companies are willing to accept partial payment on the amount of money owed it by individuals. This is because many credit card companies would prefer to receive a percentage of the money owed it rather than none at all. If a person declares bankruptcy, his credit card debt is often voided. Therefore, a person undergoing financial hardship may wish to propose a settlement with the company.

Considerations

When and why a credit card company will be willing to renegotiate its debt contract with an individual is not generally made public. This is because the credit card company will not benefit from telling consumers under what conditions they can get away with paying only a portion of the money they owe. Therefore, to renegotiate, a person must generally approach the credit card company and make a proposal.