How to Negotiate a Lower Pay-Off of Credit Card Debt?

Don't lose your mind battling debt. Call your creditors and find common ground.
Don't lose your mind battling debt. Call your creditors and find common ground. (Image: horrified expression image by leafy from

If you're burdened with credit card debt, it can seem like there is no end to your troubles with the high interest rates, late fees, and ever-descending credit rating. Believe it or not, your debt is as big a problem for the economy as it is for your personal finances, which means your credit lender is eager to help you get out of debt.

Collect as many credit card offers as possible before negotiating with your credit provider. This allows you leverage when negotiating terms because your credit card company knows you are informed about your options.

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Call your credit card company and ask to speak to a supervisor. Don't waste time talking to a front-line representative. He is unlikely to be cooperative with any of your requests and does not have the authority to grant you a modified lower interest rate or a settlement on a preexisting debt.

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Plead your position with the supervisor. Point out that you have numerous credit offers for lower interest rates. Inform her that if she can't come to an agreement with you then you will have no other choice but to close your account. (Don't actually close your account yet, no matter how this negotiation goes.) In most cases, the company will not require any tangible evidence to support your claims about other offers, and any real doubts can easily be settled with a simple Internet search. Use this time to lobby for cutting the debt in half and paying it back through monthly payments at a significantly lower interest rate.

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If your credit card company does not cooperate, transfer your balance to another credit card company. Many credit card companies offer deals for balance transfers like 0 percent interest on the transfer and purchases for up to 15 months. (This does not mean you have to close the account with the first company, just that you are consolidating your debt from multiple cards to one single card with the lowest interest rate. You still have the option of keeping the first account open.)

Follow up on your threat to close your first account. Most credit card companies have a department specifically designated with the authority to close your account, but expect this department to do whatever it takes to keep you from leaving. Your account won't be officially closed until you make a direct request for it to be done, and even then you will be transferred to this department where they will make a final attempt at negotiating. By this stage, you should have already transferred your balance to another account. It is entirely up to you whether you want to take the deal offered or just close the first account altogether.

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Tips & Warnings

  • Pay more than the minimum due on your statements. Many people get into debt by only paying the minimum required each month. If you cut a few daily expenses and use that extra money to pay double or even triple your minimum payment each month, you will be well on your way to conquering the debt.
  • If you can't find a company willing to let you transfer your balance, pay off credit cards with the highest interest rates first and pay the minimum on the rest of your cards. This method is known as snowballing your credit card debt.
  • If your debt makes up more than 70 percent of your credit card limit, it is almost mandatory that you renegotiate a settlement with your credit card company.

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