How to Negotiate the Original Balance on a Credit Card

Before you negotiate the original balance on your credit card, understand that lenders are always more willing to work with you if you are both past due, and able to pay a lump-sum amount to cancel your debt. Being past due, and settling for an amount that is less than your original debt will hurt your credit rating. You will have to decide whether or not the damage to your credit score justifies the money that you will save.

Instructions

Negotiating Your Original Credit Card Balance

1




Keep your credit card statement handy.

Look at your most recent credit card statement and circle the balance. This is the amount you will be negotiating to reduce. You will also need the account number listed on your statement to begin negotiating.

2




Offer to settle your debt for an amount that you can afford.

Decide how much money you are willing to offer your credit card company to cancel your debt. If your debt has been sold to an outside collection agency, you may be able to offer as little as 20 percent of the amount that you owe. If your debt remains with your original creditor, you might need to offer as much as 75 percent of the amount that you owe.

3




Collection managers have more authority to negotiate with you.

Contact your lender. Speak with a manager in the collections department if possible. Collection managers have more authority to make settlement decisions than a normal collections representative does.

4




Get rid of your credit card fees.

Ask for fee removals. If your current credit card statement reflects late fees, annual fees or over the limit fees, ask the manager to remove them. This will lower the total amount that you owe before you even begin settlement negotiations.

5




Be persistent and polite during debt negotiations.

Tell the collection manager that you would like to reach a settlement agreement. You can either offer them the total amount that you can afford to pay up front and be firm, or you can begin by offering less than you can afford to pay and negotiate to reach an amount that both of you agree on.

6




Faxed agreements are legal agreements.

Get the agreement in writing. Have the collection manager fax over the agreement that you have settled on. Double-check the amounts and the listed account number.

7




Until you sign the agreement and mail a payment nothing is official.

Sign and return the fax with your payment. The settlement will not be effective until your credit card company receives a payment from you.

8




Don't forget to check your credit report.

Wait a month and check your credit reports. You can do this for free by visiting annualcreditreport.com. Be sure that the account you settled shows up as being settled. The account should show a zero balance and have a closed status.