Millions of Americans are saddled with credit card debt. Seventy-eight percent of American households--about 91.1 million people--had one or more credit cards by the end of 2008, according to the April 2009 Nilson Report. At that time, Americans' credit card debt reached $8,329 per household, including those without credit cards. The United States Congress' Joint Economic Committee reported in May 2009 that U.S. revolving consumer debt was about $950 billion and was made up mostly of credit card debt.
Payoff in a Lump Sum
If you want to lower your credit card payoff amount, try paying it off in one lump sum. Contact your creditor and offer a lump sum settlement that is no more than 15 percent of what you owe. Your creditors may not agree to the 15 percent but will usually settle for a payoff of about 25 percent to 40 percent of your original balance. Ensure that your payment will not post as a charge off on your credit report, as this will affect it negatively and will stay on your account for up to seven years.
Transfer Debt to a Lower Interest Card
Some credit cards companies offer 0 percent interest for a certain amount of time as an introductory rate if you transfer your balance from a different credit card to theirs. Some may charge a balance transfer fee and the opening of a new credit card may negatively impact your credit score on the short term but if you pay off the card within the time of 0 interest, you'll have paid less to pay off your debt than if you didn't transfer the balance.
Renegotiate Credit Terms
Another way to lower your credit card payoff is to renegotiate your contract terms. Speak with your creditor about getting a lower interest rate. Tell them that you can only pay off your debt at a lower interest rate. You can ask them to waive fees for late payments and being over the credit limit. You also can request for an easier payment plan where you'll only have to pay every two months instead of monthly. Stress financial difficulties you are having and any potential future hardship to renegotiate an affordable plan.
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