How can I negotiate credit card debt?

When consumers get into too much credit card debt, they often seek relief by trying to negotiate their bills. Cardholders can elect to use government funded debt negotiators, pay a credit card debt negotiation company, or settle their debts on their own.

Successful credit card debt negotiation requires both knowledge on current Federal credit card laws as well as a clear objective. You can also find out more on interest rates, payments, and credit card debt with our credit card finder.

Credit card debt negotiation usually happens after the cardholder has already fallen behind. In fact, many credit card companies will not negotiate debt unless the account in question is delinquent. If you are currently able to pay your credit card bills but you would benefit from debt relief, you should ask your credit card company to voluntarily reduce your interest rate.

How does credit card debt negotiation work?

The first thing you will need to do is locate the right department at your credit card company in order to make an offer. This can be done over the phone or in writing. Credit card companies will often send debt settlement letters to consumers that have had their accounts charged off. When a credit card is charged off, no payments have been made in six or more consecutive months and the credit card company no longer believes that it will be able to collect the full amount due.

Credit card debt negotiation can also occur directly after legal action has been taken. In order to avoid paying legal fees, paycheck garnishment, or levies, the debtor will make an offer to pay the amount due or establish a payment plan. Although the credit card company filing suit may not want to accept a settlement offer at this time, many judges are consumer-friendly and will put a hold on legal actions until both parties are in agreement.

When a credit card debt negotiation agreement is made, payments have to be made consistently in order for the agreement to remain in effect. Even if you come up with a payment schedule over the phone, you should request your credit card company to send you the agreement in writing. This will protect you legally should the credit card company ever decide to rescind its offer.

What happens if you are not able to negotiate your credit card debt?

In the event that your credit card debt negotiations go nowhere, there are a few courses of action that you can take. Sending in payments to your credit card company voluntarily, even if it is less than the minimum amount due will help to show good faith on your part. In most instances, the credit card company will accept your payments and apply them to the debt. You can also look for a new channel to get in communications with. Often, credit card debt settlement can be reached if you are able to explain your circumstances and get in contact with a higher up at the credit card company.

Some consumers that are in a substantial amount of debt will file for bankruptcy, which will essentially wipe out their outstanding debts. The U.S. Courts website shows consumers what steps they must follow in order to file for bankruptcy and what they can do if they are not able to afford a lawyer.

Can you get a new credit card if you are in debt negotiations?

It is probably not a good idea to get a new credit card if you currently behind with payments owed to other credit card companies. Not only will any applications that you submit appear on your credit report, but it could also thwart your efforts. The time to establish credit should occur after you have negotiated all of your credit card debt settlements and been able to get all of your accounts updated on your credit report.

While applying for a new credit card is not recommended, it is still possible if you have a high enough credit rating. Getting a secured credit card will also be possible if you have enough cash. Having new lines of credit will help you to raise your credit scores, but it might also cause the credit card companies that you owe to become more aggressive. Any activity on your credit reports that indicates that your financial circumstances have improved can cause debt collectors to get in contact with you and credit card companies to file suit.

Get a new credit card from credit card finder after settling your credit card debts!