Reducing Credit Card Debt Part 4 – Negotiating Terms On Your Credit Cards

[widget:ad_unit-1221255277]If things have come to the point where you need to start doing something, hopefully before you start to receive threatening calls from the credit card companies or when you just see a crisis looming on the horizon, you may want to get a plan for negotiating a plan with your creditors. You may only need to lower your rates to get a handle on things, and the good news is that that is very possible.

Roughly twenty percent of credit card borrowers have negotiated at least some terms with their credit card issuers, usually the interest rates and annual fees. These are the ones you may be able to get something done on. Don’t expect too much mercy on late fees and raising your credit limits if you’re already having a problem. Annual fees are probably the easiest to get rid of, as there are many issuers that don’t charge them at all anyway. The customer service representative you talk to on the phone may have some latitude to help you with rates, but then again you may have to work your way up the ladder. Each company’s credit criteria is a little different, and there are usually no rules set in stone; each case is handled individually.

While most issuers don’t want to talk about debt negotiation, they’d really rather do some  of that than have you default on the debt, which is why many now have hardship programs in place, which reduce interest and payments for a few months while you get caught up on your bills. You don’t hear much about these programs, but with a little perseverance you can ferret them out. They’ll also appreciate the fact that you came to them first, if in fact that’s what’s happening here. The collection process is costly to them, whether it be simply having to have someone call or actually engaging a collections agency down the line, so they want to avoid this at all costs.

When you call your lenders be sure and explain your situation clearly; how this came to be, how long you anticipate this problem will last, what if any financial promise you see in the near future. In other words try and paint a clear picture before you ask for what you want. When you do ask, explain what you can afford to do at this time, and ask how they can help you.

Be sure and document all your conversations with any of your lenders, as this will be helpful should anything go legal on you.

If you can’t get the lenders to agree to a reduced payment, a change in terms or anything other concession, then it may be wise to consult a credit counselor. Don’t threaten this or give them any reason to do anything adverse to your credit rating. Be polite, but firm in your desire to work this out for all concerned and you’ll eventually come out the other side!