Do you have too much credit card debt? If so, you’re not alone. The average American household has well over $5000 of credit card debt. The exact numbers vary by study but $8000 isn’t uncommon. Of course, that’s cold comfort if you’re stuck trying to make payments that you can’t afford. Don’t worry; you have options. Have you ever tried to settle debt with a credit card lender? It’s possible. Here’s how.
Call Your Credit Lender
It all starts with a call to your credit card lender. Note that the customer service representative you speak with first may or may not be able to assist you. You might need to ask to speak to a specific department or someone higher up in the management chain. Once you reach the right person, here are some of the things that you might ask for in order to settle debt with a credit card lender.
Ask to Remove Fees
If part of the reason that you can’t pay off your credit cards is due to accumulated fees, such as late fee payments, then ask about removing those fees. Sometimes the credit card company will do that in order to help you get back on track.
Ask for a Lower Interest Rate
If you owe less in interest each month then you might be able to pay off your balance more quickly. It doesn’t hurt to ask about a lower interest rate.
Inquire About Payment Assistance Programs
If you want to settle debt with a credit card lender, then ask outright about the payment programs that they can offer you. Sometimes they can enroll you in a program to reduce your monthly payments. They may have special hardship plans. Ask about all of your options and see if any of these are right for you. Of course, make sure that you understand all of the terms before you agree to a new plan.
Request a Lump Sum Payment Amount
Do you have some money saved up that you’re sad to see going to pay off accrued interest each month? Ask to settle debt with your credit card lender by offering a lump sum payment. Sometimes they’ll allow you to pay less in total if you pay it in full. For example, if you owe $5000 on one credit card, then they might accept $3500 if you pay it all off today.
Note, however, that credit card companies are in the business of making money. They want to take your interest payments for as long as possible. Therefore, if you’ve paid on time consistently over the years, they may not be willing to accept a lump sum payment. Still it doesn’t hurt to ask.
Other Ways to Pay Off Debt When Credit Card Lender Won’t Settle
If you can’t settle debt with a credit card lender on your own, then you might need to turn to outside assistance. There are debt settlement and debt management firms that will negotiate on your behalf. They’ll pay off your lenders, and then become your new lender. Depending on the terms you agree to, you can significantly reduce your interest rate, monthly payments and total amount owed by doing this kind of debt settlement. However, it has potential negative consequences for your credit report, so make sure to review your options carefully.
You might also check into getting a personal loan. If you can get a secured loan (such as refinancing your home) to pay off unsecured debt (like credit cards) then you can often lower your payments. If you have good credit, you might even be able to get a good balance transfer offer that significantly reduces your interest owed. Note that you’ll likely pay a small fee to do that, though.
Review all of your options. Try to work to settle debt with the credit card lender. Then look for outside options if you need to. You’re not the only person going through this, and you really can get your debt under control.
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Kathryn Vercillo is a professional writer with more than a decade of experience writing about healthy living and personal finance. She lives in San Francisco, where she has learned to maximize frugal living tips in order to thrive as a freelancer in one of the nation’s most expensive cities. When she’s not writing, she’s exploring the city on foot with her rescue dog. Learn more about her at www.kathrynvercillo.com. Kathryn also writes about saving money with coupons over at GroceryCouponGuide.com .