How to Get a Credit Card Company to Settle

Settling your debt with your credit card company can be an extensive process.

It can be difficult to get a credit card company to settle your debt. A debt settlement is when the credit card company agrees to take less money and then marks your debt as paid off. They are more willing to negotiate if you are behind on your monthly payments--credit card companies first want full payment for purchases.

Things You'll Need

• Contact information
• Phone
• Money to settle debts
• Paper
• Envelopes
• Stamps
• Money orders

Instructions

1. Call your credit card company and see if it will forgive the late payment fees and penalties. You may also be able to negotiate to have any over limit penalties reduced.

2. Save up money to offer as a settlement amount. When a credit card company settles, it wants to receive the agreed-upon amount in full at the time of the settlement. Generally you should have about fifty cents on the dollar to offer as a settlement amount.

3. Contact your credit card company and offer to settle the debt. Tell them how much you are willing to pay and see if they are willing to accept your offer. You may want to start a bit lower than the amount that you have, so you can negotiate up.

4. Ask for a letter that states the credit card company will accept this amount as settlement in full. Do not pay any money until you receive the letter.

5. Send the money into the credit card company as a money order or official check. Use a return receipt so that you will know it received the payment.

6. Check your credit report after 60 days to be sure that your debt is marked as paid.

Tips & Warnings

• Credit card companies want to collect all of the money you borrowed from them. They will not easily settle, and if you have been making payments on time each month, you will not be able to negotiate your debt down.

• A debt settlement puts a mark on your credit. It is better than bankruptcy, but if you want to improve your credit card score, you should work to pay off your debts in full. Settled debts are still better than outstanding debts that you are behind on payments

• Keep a copy of the letter that states that the account will be considered paid in full, a copy of the money order you sent and the confirmation receipt that you got from the post office in case the credit card company tries to collect on the debt later.

References

• ABC News: Negotiating Away Credit Card Debt
• MSN Money: When Debt Settlement Makes Sense