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Credit Card Debt Negotiation Tips

Credit Card Debt Negotiation Tips

Some tips on debt negotiation certainly prove useful when you are under a huge burden of credit card dues and desperately want to come out of it. Read through to know how to negotiate your credit card debts successfully.
WealthHow Staff
Last Updated: Nov 27, 2018
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Each individual has his or her own reasons for accumulating debt. Some may have been out of employment, while others may have made haphazard expenditures and showed the least concern for proper financial planning!
Such a situation can be really disturbing for your mental peace. But is there any way to come out of it? If you think a little out-of-the-box! In a manner which would benefit both the parties, you and your credit card company, by means of negotiation. Some prudent ways to negotiate your debt are explained here, to help you restore your financial condition.
The process starts with a call to your credit card company. Many people hesitate to speak about their debts to anyone, but you must be able to bring this to the notice of your provider.
Lump Sum Settlement
This is the easiest and also the least complicated solution. You can straight away opt for a lump sum settlement to clear off your dues. Suppose you are liable to pay USD 10,000 on the card and are in a position to pay just USD 2,500, then you can offer a 20 percent payment out of the total amount.
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However, if the bank insists on 30 percent, then you can come up to a midpoint of paying 25 percent of the total amount. This is the most popular negotiating technique.
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If the company finds you are on the verge of bankruptcy (or if you will be filing for bankruptcy very soon) and would not be able to pay much more, they may agree to your proposal, as something is better than nothing! But be sure you have the offered amount with you, as you will have to make the payment at once.
Debt Consolidation
Debt Consolidation
For a common man, debt consolidation is a good way to get out of debt. A person takes a loan at a lower or fixed rate and pays all credit card dues with it. It is a win-win situation for the cardholder and card companies. You may get a discount on loan repayment.
Waiver of Charges
woman requesting to man
Another way is to request the company to waive off charges involved in accessing money through ATMs and paying late fees. This could reduce your burden to some extent. However, some companies might refuse this proposal.
Renegotiate the Interest Rate
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You may find the interest rates too high if you are into huge debt. In such a situation, you can renegotiate a lower interest rate with your card provider, as compared to the existing one.
The company might agree to it without much of a fuss, if you are regular with your payments. However, if you aren't, you can at least make an attempt to ask, whether such a thing is possible!
Longer Payment Duration
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Another healthier option is to come up with a payment plan in coordination with the card company. See that you consider your monthly budget and other essential monetary commitments before creating the plan.
Currently, if you are in a two-year repayment period, then you can try to design a plan which would allow you to pay back in four or five years. The card company might readily agree to it, as receiving the money at a slower pace is always better than not receiving it at all!
Documentation
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The company might ask you for some proof for your proposal. If you do not produce relevant documents, you may get into trouble. It is better to get everything well-documented and duly signed by the relevant authority, which can be produced in a law court.
woman talking on phone
If you find it difficult to deal with your company in this regard, then you can seek help from credit counselors, who would either train you or do the task themselves. Apart from these methods, you also need to be patient and keep a constant follow-up, till a conclusive agreement is reached.
DisclaimerThis information is for reference purposes only and does not directly recommend any specific financial course of action.