How To Negotiate Your Credit Card Debt?  

Want to know how to negotiate your credit card debt? Keep reading!

On average, Americans owe around $1 trillion in credit card bills, according to findings from Experian, so if you also have an insane amount of credit card debt and feel like you are never going to get rid of it, you are not alone. 

Credit card debt can easily get ahead of you while wreaking havoc on your finances and credit scores, making you feel like it’s impossible to get out of this trap. 

The good news is that most credit card issuers are often willing to negotiate the payment terms of your debt so they can get some of its money back.

In this article, we’ll discuss what credit card debt, the types of credit card debt settlement plans, and how to negotiate it effectively is. 

Let’s get started!

How To Negotiate Your Credit Card Debt? 
How To Negotiate Your Credit Card Debt? 

What Is Credit Card Debt? 

Credit card debt refers to the accumulated outstanding balances that borrowers carry every month.

It is a type of revolving debt that you can continue borrowing as long as you are in a position to repay enough without exceeding your credit limit.

When credit card users fail to pay what they owe, the bank will charge interest on the borrowed amount or even sue, but the company will not come to seize Your assets.

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Types Of Credit Card Debt Settlement Plans

The good news is that most credit card issuers are often willing to negotiate the payment terms of your debt so they can get some of its money back.

Credit card companies are also open to negotiation to maintain long-term relationships with clients.

Credit card companies offer several types of debt settlement plans depending on the financial situation of the borrower.

The most common credit card debt settlement options are: 

  • Workout Agreement 

This agreement is made when your account gets defaulted. Your creditor provides you with easy repayment terms to pay down your debt.

It involves reducing the payment amount or interest rate and even the cancellation of the fees you pay while you are in repayment.

In the debt management plan, your credit counseling agency works with your creditor and comes up with a repayment plan in which you deposit money with the credit counseling agency which then uses your deposit to make monthly payments to your creditors. 

  • Lump-sum Settlement 

When credit card users fail to pay what they owe, the bank will charge interest on the borrowed amount or even sue, but the company will not come to seize Your assets.

  • Hardship Plan

This option involves lowering your credit card’s minimum payment, fees, and interest rate.

A hardship plan is suitable for people dealing with job loss or short-term financial hardship. However, by using this plan, your credit card issuer may suspend your credit card.


How To Negotiate The Credit Card Debt? 

Negotiating with your credit card company seems daunting because most companies are unwilling to change their terms unless they are worried about you filing bankruptcy.

To improve your chances of settling the debt, here are steps you must follow while negotiating your credit card debt:

  1. Assess Your Debt

Start by assessing how much credit card debt you owe. Make an itemized list of how much you owe on each card and the interest rate you are going to pay. 

  1. Explore your Options 

Next, figure out what kind of deal you want to make with the credit card company, what debt settlement options are available, and how much you can afford to pay.

  1. Consider the risks Involved

All debt settlement options have some downsides and may hurt your credit scores one way or the other, so it is important to be aware of the risks beforehand.

Also, keep in mind that your forgiven credit card debt is considered taxable income. 

  1.  Contact Your Credit Card Issuer

Once you select the debt settlement option that makes sense for your circumstances, call your credit card company and speak to the relevant department’s customer representative. Explain your financial situation to them and politely make your offer. 

  1. Get Everything in Writing 

Once you and the creditors agree to a settlement plan, make sure to get the agreement in writing that clearly explains your financial situation and the terms of the agreement. 

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