How to Bargain for a Credit Card Payoff

You can successfully bargain a credit card payoff without any special training or hiring an expert. If you're willing to take a few hits to your credit rating in the process, you can strengthen your negotiating position by waiting for the credit card account to become late or delinquent. If you have an unsustainable level of credit card debt, it may save you more money to negotiate a payoff rather than struggle to make minimum payments every month.

Instructions

Delinquency

1

Allow your credit card account to become at least 60 days late. Once your account crosses that line, most companies will begin sending you offers in the mail for interest payment freezes, balance reductions and interest rate reductions. They may also offer favorable repayment plans that will allow you to pay down your balance without worrying about additional interest accrual. Your credit score will be damaged, but not as much as it would be if the account entered delinquency. If you would like to keep your credit card account and preserve your credit score and don't mind paying extra, you can accept your company's terms. If it doesn't contact you with settlement offers, call your credit card company and ask them to make you an offer.

2

Wait for your credit card account to be charged off and sold to a collection agency. Credit card charge-offs remain on your credit report for seven years, affecting your ability to take on affordable debt. The advantage to this is that you will now be able to negotiate a payoff agreement for much less than the total amount that you owe.

3

Contact the collection agency that now owns your delinquent credit card account to request a debt settlement. The collections agency will likely contact you first regarding your debt, so you can get the contact information from those communications. Offer to settle the debt for at least 10 percent of the total amount. Raise your proffered payment in 5 percent increments if it refuses. Request that any debt settlement be mailed or faxed to you so you can sign it. Once you have received this document, mail your payment to the collection agency with a copy of the agreement.

4

Respond to all court summons promptly if you are sued to collect on the credit card debt. It's unlikely that you will receive a judgment against you immediately if you make your court appearance. Once you are in court, you can settle the debt using a similar strategy to the one previously outlined with the lawyer representing the collection agency. Ensure that you get all agreements for payment made in writing and keep the original for your records.