Negotiating With the Credit Card Companies

Due to the high levels of unemployment and underemployment during the recent recession, millions of people had to rely on their credit cards to either pay for financial emergencies or to support themselves on a monthly basis.  While doing this may have been a short-term solution, many people now find themselves in a considerable amount of credit card debt.  Due to the high interest rates charged by credit card providers, getting out of debt completely may seem impossible for some people.  While paying off the debt with the high interest rates may seem impossible, people could save a considerable amount of money by negotiating with the credit card companies.  A debtor could negotiate with the credit card companies a few different ways, which could save them a considerable amount of money, achieve financial freedom, and also help to protect their long-term credit history. 


The first way that you could negotiate with the credit card company would be to try and negotiate a lower interest rate.  Credit card providers commonly charge interest rates of twenty percent or more.  With those rates, people in debt will spend thousands of wasted dollars on interest every year.  While credit card interest rates are high, most credit card providers will reduce interest rates by simply asking.  If you have made all of your payments on time, receiving a reduced rate should be very easy.  Negotiating a lower rate could save you thousands of dollars per year and could take a lot of time off of the amount of time that it takes to repay the debt.


Another way that you could negotiate with the credit card companies would be to try to set up an organized payment plan.  Credit card companies are frequently willing to negotiate with troubled borrowers in an attempt to receive all of their money back.  One of the most popular tactics would be to convert the credit card balance into a term loan, with easy to make monthly payments.  Most of the time, you will also receive a reduced interest rate that could save money.  The payments and amortization periods are typically very flexible, which can make this option affordable for most people.  When setting up a payment plan such as these, you will typically no longer be able to borrower money off of the credit card.


The third way that you could negotiate with the credit cared company would be to try and negotiate a reduction in the amount of money that you owe.  While the credit card companies prefer to collect all of the money that you owe, they are also very aware that a troubled borrower that declares bankruptcy may never repay any of the debt.  When negotiating a reduction in debt, it is important that you prove that you are going through a financial hardship, such as a loss of a job or a reduction in income.  However, you should also show some form of good faith by either paying down a portion of the balance up front or agreeing to a new repayment plan. 


When negotiating with the credit card companies, it is very important that you get your entire agreement in writing.  While the representative that you are talking to may be honest and forthright, it is very possible that your agreement could get lost in the shuffle.  Be sure to request an email confirmation and written confirmation from the credit card company that accurately outlines your negotiations and the terms of the agreement.  This way, you will always have proof of the agreement in the event that the agreement is lost by the credit card provider.

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