How to Establish a Payment Plan With a Credit Card Company

No more than 15 to 20 percent of your monthly income should go toward credit card bills, according to the the University of New Hampshire Cooperative Extension website. When you find yourself overextended and unable to pay your creditors, you may try to make arrangements for a payment plan. Creditors have different policies in place for payment plans, and they are not obligated to agree to any payment plan. Credit history with the company and the current state of the consumer's account influence the type of payment plans creditors accept.

Instructions

1

Total your monthly expenses. Add together all of the expenses that occur on a monthly basis for the same amount -- such as rent or mortgage, car payment and insurance. Add your other expenses, such as groceries, gas and utilities. If you put money in savings each month, add the amount to the total. If you add an expense amount for entertainment, dining out and clothing, consider reducing the amount or eliminating it for a few months while you get back on track with your credit cards. Don't add any credit card expenses.

2

Subtract your total monthly expenses from your take-home pay or net income. Based on this planning strategy suggested by the University of New Hampshire Cooperative Extension website, the remaining amount represents money to pay toward credit card bills.

3

Write down your credit card information, including the name of the companies, account numbers, current balances, interest rates, late fees (if applicable) and current payments due. Divide the remaining amount of money among your credit cards. For instance, if you have $250 left after making the minimum required payments and you have five credit card accounts, plan to pay each creditor $50. Alternatively, allot more money to the card with the highest interest rate, or pay the most money to cards with the lowest balance. As noted by the Consumer Reports website, a number of systematic strategies to pay down credit card debt exist. Choose the one that best fits your situation and personality, and stick to it.

4

Call your creditor and ask to speak with a person who can assist you with a payment plan. Identify yourself and ask for the representative's name who helps you establish a payment plan. Write down her name for future reference. Tell the representative you can no longer continue to make payments on your account under the current agreement, and request a more manageable payment plan.

5

Respond to the representative's questions regarding your financial situation and how much you can afford to pay currently toward the account, especially if the account has a past-due status. Be honest. Don't commit to an unaffordable amount. Ask the representative to reduce your interest rate and waive any late fees while negotiating a payment plan. Alternatively, write a letter to your creditor requesting a partial payment plan. The letter should detail your debts, assets, income and a specific payment plan proposal.

6

Write down the amount that you agree to pay for each account, any reduction in the interest rate and the due date for the payments. Put the information in a safe place. Make payments as agreed.