How to Persuade Credit-Card Companies to Lower Debt

Credit card companies may allow you to settle your debt by paying off less than the full balance. This process of lowering your credit-card debt is called debt settlement. Generally, the card companies will make settlement offers when you are four to six months behind. After six months the companies generally give up trying to collect, list your account as charged off and sell it to a collection agency.

Instructions

1

Check your billing statement to determine how many months you are behind on your payments. You can ask your card company for a settlement at any time, but generally the best offers are available just before your account is scheduled to be charged off.

2

Call your card company once you have confirmed that you are at least four months behind. Tell the representative that you are unable to continue making regular payments on your account and that you would like to settle for less than the full balance. According to "The New York Times," card companies will sometimes settle for as little as 20 percent of the balance, although most settlements are for roughly half the amount owed. Offer to settle the debt for 20 percent of the balance.

3

Wait on the phone for a counteroffer, which could be much higher than your offer. For example, the card company might offer you a settlement for 90 percent of the balance. You can accept the counteroffer or continue haggling. Politely end the discussion if you cannot reach an agreement and hang up.

4

Call back several days later to continue the negotiations. The card company will have placed notes on your file regarding the previous discussion. Ask the representative if it can make a better offer. Continue this approach, even if you have to keep calling back, until you have a deal.