How to Negotiate a Payoff Balance

If you have high-interest-rate credit cards that you can no longer afford to pay, you should negotiate a payoff with your creditors eliminate the debt. Negotiating a payoff amount with creditors will have a negative impact on your credit score, but the long-term effects of allowing credit accounts to go unpaid until they go to legal action can be even worse. Remember that the creditor would like to get something for the debt you owe---you just need to work with them to find the right amount.

Instructions

1

Gather your credit card bills together and prioritize them by interest rate. The higher the interest rate, the more debt is getting piled on to your existing balance every day. The best approach is to get rid of the high-interest credit card debt first.

2

Determine how much you can realistically afford to pay per month in payments for all of your accounts. No matter how much you negotiate the payoff amount to be, you will still have the opportunity to negotiate a monthly payment for the final balance. The credit card company will want to have an amount that you can pay so that you do not default on the agreement. Defaulting on a payoff agreement could lead to legal action from the credit card company.

3

Call the credit card company and ask to speak to someone who deals with negotiating payoff amounts. The representative who answers the phone will likely not have the appropriate power to negotiate.

4

Begin the negotiation by asking the credit card company to drop all late fees and penalty charges. Then ask them to reduce or eliminate as much of the interest due as possible. The credit card company will be most interested in retaining the principal due, so you may want to offer a deal that pays all of the principal but only a fraction of the interest.

5

Negotiate a monthly payment. The credit card company will mostly be seeking payments you can adhere to.