How to Negotiate With Your Credit Card
According to a study conducted by The Credit Research Bureau, once a consumer's credit card payment goes more than 60 days past due, the card issuer will have only a 50 percent chance of receiving payment--down from 90 percent if the payment is less than 60 days past due. Because of these statistics, credit card companies will negotiate with consumers to improve their chances of repayment. This includes negotiating interest rates and both late and over-the-limit fees.
Other People Are Reading
Instructions
-
-
1
Have an action plan ready. Make a list of which credit cards are most important and for what reason; for instance: the one with the lowest interest rate or the one with the lowest balance. Then list which changes-- for example, negotiating a lower interest rate or freezing the current rate-- would have the most impact on the account.
-
2
Contact your credit card company before the account is passed to a collection agency. Generally, credit card companies will only let an account go a week past the payment date before they begin phoning the card holder for a payment. Typically, they have in-house or in-network collectors, but after the debt goes more than 90 days past due the account is usually turned over to a collection agency. Your best bet to salvage the account and minimize negative effects on your credit report is to contact and deal with the credit card company directly, as early as possible.
-
-
3
Be prepared to make larger payments or a lump sum. Credit card companies will negotiate interest rates or fees if they are confident they will be able to collect a payment or a lump sum. Ask if they are willing to lower or freeze your interest rate and/or rescind or not continue to charge late payment fees and over-the-limit fees. Many credit card companies will only agree if they are able to close the account or have the balance paid in one lump sum.
-
4
Get everything in writing before sending a payment. A common mistake is to believe that every call is monitored and/or recorded; therefore an agreement is heard by another credit card representative or is in a digital file. While most calls are recorded, you will need a written agreement for it to be compulsory. Once the terms are agreed upon, have a written letter of agreement mailed to you and send your payment by money order or certified check.
-
1
Tips & Warnings
Ask the credit card company if they have a hardship deferment program for consumers that have become disabled or unemployed.
Do not give a credit card company (or collection agency) your bank account information. By law, if you authorize access to your account they are able to withdraw the amount you owe rather than the amount to which you agreed---especially if the agreement is not in writing.
References
- Photo Credit bank statment and cut credit card image by Warren Millar from Fotolia.com
