How Do I Get Credit Card Companies to Consolidate My Debt?

Getting in over your head when it comes to debt can happen to anyone. Consolidating that debt can save you thousands of dollars in late fees, interest payments and past-due charges. If you follow the right procedures, you can get credit-card companies to work with you on consolidating your debt.

Instructions

1

Determine your entire debt load. Sit down with all of your credit-card bills and look at the total amount that you owe. Input that information into financial-planning software like MS Money, or use a simple, Excel-based spreadsheet.

Repeat for each credit card, but also input the annual interest rate and current payment. Chances are, you'll find you are losing hundreds of dollars each month in interest alone.

2

Look into consolidating those debts into one manageable monthly payment. There are numerous services that will account for your debt, negotiate lower interest rates on your credit cards and have companies reduce or eliminate late fees or additional charges. Typically, to consolidate your debt, you'll need to use such a company, and pay a small minimal fee each month for their services. (See Resources for recommendations.)

3

Inform your creditors that you are consolidating your debt. Credit-card companies know that consolidation is normally a result of financial hardship, and will typically work with you to pay off your debt. Even though the creditor might take a bit of a loss, they know you are making a good-faith effort to pay what you owe.

4

Inform the creditor (either by telephone or in writing) that you are consolidating with "XYZ Company" and will be paying them on the same day each month. "XYZ Company" will then distribute their payment. Should your creditor have questions, you can provide the consolidation company's telephone number, so they can speak with a credit counselor in regard to payment arrangements.

5

Know that your creditor might require you to provide them with a copy of your budget, illustrating why you are asking to make a lesser payment or justifying your request to reduce interest by consolidating. This is very typical, and most credit counselors will ask that you provide them with a budget to quality for consolidation services. Should your creditor ask for this as a stipulation of agreeinmg with your consolidation plan, your credit counselor can provide it to them.

6

As you make your calls to each creditor, add that information to your spreadsheet. Also include the date and time of the call, whom you spoke with, and a brief overview of the conversation. Keeping good records will make it easier for you to communicate with your creditors and credit counselor during this process.

7

Each month, make sure that each creditor received his payment on time, and note that information in your spreadsheet. You'll begin seeing savings in your payment and interest almost immediately, and most consolidation companies can show you a running tab of how much money you are saving by consolidating your debt.