How To Negotiate Credit Card Debt With Your Creditors
Too many people believe that they are backed into a corner when it comes to credit card debt. They don’t believe they have any options or bargaining chips in their favor. Left to simply shell out the minimum payment and watch the principal go down cents instead of dollars, debtors feel like they are being sucked into a black hole that will end up with them being broke, bankrupt, or both. The truth is that every consumer has options, and it doesn’t take a credit counseling professional to attempt to negotiate a deal with credit card companies.
Negotiating To Get A Good Settlement Offer
The goal of negotiating with a credit card company is to get a viable settlement offer that lets you pay off the debt for less than the full amount owed. The value of credit card debt settlement is that once the deal is done, that debt is satisfied, meaning no more payments and interest fees.
The balance after a successful settlement is $0.00.
Creditors are often open to such negotiations because they fear consumers declaring bankruptcy and forcing them to lose the entire amount. You have the upper hand in approaching them because they interpret your advances as a last effort to satisfy your obligation before turning to more desperate measures.
The first step is you are going to need some cash on hand. After all, the point of a credit settlement is to make one lump sum payment to satisfy the debt that is considerably lower than the full balance. There’s no real point in trying to negotiate a settlement if you don’t have the money necessary to fulfill it. Then, you have the power to contact your creditors and ask if they are interested in a settlement. Most creditors have a department just for this very situation, and their agents are often authorized to make offers on the spot. Huffington Post shares that debt collectors will often agree to take less than you owe if you negotiate with them.
Negotiating With Creditors – Don’t Take “No!” For An Answer
Be firm in your approach. If the settlement offer is simply not possible with your current financial position, make a counter-offer. Tell them what you can afford to do, and don’t be afraid to ask if some sort of payment plan can be set up to make the burden easier. Explain that you are the kind of person who wants to pay their bills, and making contact with them shows that you are not simply trying to get out of paying them. If your creditors say no to your first offer, wait a few days before you make the next one. Try at the end of the month when the debt collectors have to make their quota numbers and try again.
You will not get the best settlement offer on the first negotiation attempt
If you have a particular financial hardship, like losing your job or unexpected medical and hospital bills, throw that in as well. Make them feel your pain and understand why you are asking for a settlement. Hearing your overall situation can influence them to want to make a deal. This is because of for fear of a possible bankruptcy proceeding in your future. There is no need to make empty threats; simply tell the truth, be forthright and honest, and don’t agree to a deal that you can’t honor.
So many people hurt themselves by simply sitting around and doing nothing. Paying the minimum payment can lead to years of interest fees and little progress toward the principal.
Missing payments can severely damage your credit rating. This can lead to troubles getting financing for other things down the road. It can be for a car loan or even a mortgage loan application. Simply ignoring your debts and not paying them can eventually lead to a lot of financial troubles. It can result in lawsuits, wage garnishments, and liens on your property. Take control of your own situation and contact your creditors. Negotiating your credit card debt problems away is a great way to get your finances back on track. This can lead to being able to claim debt freedom.