Negotiating with your credit card companies is something that you can do on your own. As a CNN report points out, the only thing a debt counseling company is going to do for you is add fees to a process that you could conduct on your own. It is important to have an understanding of what to expect from the credit card companies and to have a plan before you start negotiating. Your chances of a successful outcome are much better if you go into it prepared.
What They Want
The credit card company just wants their money. And they do not want to have to spend more money to get their money from you. That means that they are not in a hurry to hire lawyers and take you to court over a couple thousand dollars in credit card debt. This does not mean that the credit card company will not take you to court. If they feel that court is their only resource, then they will use it. But their first inclination is to work with you to find a solution and not add to the problem by throwing legal fees onto it, which they may never get back.
Have a Plan
The main thing to remember when negotiating with your credit card company is that the principal in your credit card debt is your responsibility. It is unreasonable to approach a negotiation with the attitude that the credit card company will take whatever amount you offer. They do not have to. However, if you develop a payment plan and present that plan to them, then they may be more inclined to listen to what you have to say. It is not unreasonable for you to ask that penalties and late fees be waived, and to discuss reducing the amount of interest owed on the account. If you promise payment on the principal, then the credit card company may be willing to work with you. Have a monthly payment figure in mind as well. One that you feel is fair to paying back the debt, but also one you know you can afford. If you default on a negotiated deal with the credit card company then the next step will more than likely be a lawyer and collections.
Have Alternatives
Some credit card negotiations are not for pay-off amounts, but rather just to try and reduce your obligation for an account you are currently using. The best way to get your monthly payment lowered is to have the credit card company lower your interest rate. If you are currently at 20 percent or higher, tell your representative you would like to have your interest rate at around 12 percent. It never hurts to ask, and you can increase your chances of success by having a lower interest rate alternative ready to go if your credit card company does not agree to the rate drop. Let your current company know that you will be taking your business elsewhere if they do not help you out. This will sometimes help to influence their decision to your favor.
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