How to Negotiate A Debt Settlement With Your Credit Card Company

Credit card debt is one of the most common ways people get in financial trouble. In the worst cases, card holders might turn to bankruptcy to regain control of their finances. However, credit card debt can be taken care of before it becomes overwhelming, even if you cannot afford to pay off the entire debt. Your credit card company may be willing to negotiate a settlement for less than what you owe to recoup at least some of the money.

Instructions

1

Determine how much you are going to offer. Decide the maximum settlement you can afford and minimum you will pay. This "low-ball" amount will be your starting point for negotiations, but don't make it too low of the credit card company will not take your negotiation seriously.

2

Call the credit card company at the phone number on your billing statement or other correspondence the company sent you regarding the debt, such as a collection letter.

3

Provide any requested information to confirm your identity, such as your name, date of birth and account number, and ask to speak with a representative about settling your debt. You probably will be transferred to the collection department or an account management supervisor.

4

Tell the representative that you experienced financial hardships that did not allow you to keep up with your payments but now want to settle your debt. You do not have to go into detail about your financial trouble.

5

Make your "low-ball" offer. Often, the representative declines this first offer and requests full payment or a higher amount. In these cases, offer your maximum amount and tell him that it is the best you can do for the forseeable future.

6

Tell the representative if you are contemplating bankruptcy to deal with your debts. Card companies are more willing to accept settlement offers if they think they will not be able to collect at all once you file bankruptcy.

7

Request the settlement arrangement in writing. The card company is not obligated to honor verbal agreements and it may renege on the settlement once it receives your money.

8

Make the payment by money order so you have a paper trail of the payment. Send it by certified mail and request a return receipt that lists the date and time the card company received it. This serves as further proof that you made the payment.

9

Contact the company in five to seven business days to ensure they payment was received and credited to your account properly. If the account was reported to the credit bureaus, request an update of the entry to reflect the paid debt.