DIY Credit Card Settlement

Do-it-yourself credit card debt settlement requires shrewd negotiation skills and persistence. According to The New York Times, credit card companies will allow you to settle delinquent accounts by paying as little as 20 percent of the balance. The company waives the remaining 80 percent and you walk away with no further obligation. That's obviously a huge savings, although most debt settlement agreements are for roughly half the amount owed.

Instructions

1

Check the status of your account by reviewing your statement or calling your card company. Generally, card companies will discuss settlement opportunities once you have fallen about four months behind. At six months, the companies usually give up on trying to collect from you and sell your account to a debt collection company, sometimes for pennies on the dollar. Confirm that your account has fallen three or four months behind before making your first settlement offer.

2

Call or write the card company. Acknowledge that you are aware that your account has fallen more than three months behind, and that you no longer can pay the full balance. Offer to settle the account for, say, 20 percent of the balance. Wait for a response over the phone or by standard mail. The card company may turn down your request or make a counter offer.

3

Keep calling or writing. Increase your offer each time as you try to strike a deal. Keep in mind that the card companies generally close accounts at the six-month mark, list them as charged-off and sell them to debt collectors. That means the card company's best offer could come just before your account is scheduled to be sold. Although writing creates a paper trail, telephone negotiations can lead to a faster agreement.