Sometimes it becomes necessary to close out your credit card account because you can no longer afford to pay the debt. If you have gone several months without making a payment and the credit card company is threatening legal action, your best bet is to negotiate a settlement. Such negotiation is never easy: you want to minimize and they want to maximize the balance. By understanding the procedure and your options, you'll pay as little as possible.
Account Closing Specialist
One way to help you get the best deal when closing a credit card account is to speak to the right person. A standard customer service representative is trained to answer the phone and read information from a script. Ask to be transferred to an account closing specialist in the retention department. Account closing specialists are trained to try to help you keep your account, but in the case of someone who is habitually delinquent, they are also trained to help close an account as efficiently as possible. This means getting you to agree to pay as much of the principal owed as possible. By speaking to the right person at the credit card company, you increase your chances of getting a better deal.
Waiving Interest and Late Fees
You have made it obvious through your payment history that you either do not have the resources to pay your bill, or you are not going to pay your bill in full. The credit card company is primarily concerned with getting the principal balance back, so the first tactic you should employ is to get your late fees and penalties waived. Keep in mind that they will be more apt to waive fees and penalties if they know they will be getting a larger portion of the principal paid in return, so when you are making your deal be sure to remind them that you will be willing to exchange late fees and penalties for more principal.
Installment Plan
When you have finished negotiating your payoff amount with the credit card company, discuss your installment payment plan. Remember that debt negotiation is one step before legal action, so when you agree to a monthly payment plan, agree to something you know you can pay. Once you miss one payment on a payoff plan you will be looking at a lot of trouble, so do not take the installment plan lightly. Create a deal that allows you to pay off your balance as quickly as possible, but also at a rate you can afford.
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