Most Americans are stuck in the hamster wheel of credit card debt, with the average American household owing $5,221 in 2021, according to Experian. It can be overwhelming to think of ways to conquer this financial hurdle, but solutions are still available for you.
Though your credit card debt may feel like endless bills piling up, it is not like other loans you may have since your assets won’t be taken away from you if you fail to pay. Even better, you may have the opportunity to settle through debt negotiation, allowing you the opportunity to get back on track with your finances.
Negotiating your credit card debt may only take a simple conversation with your credit card company. If you want to know how to do it, here is a quick guide to help you.
1. Start By Evaluating Your Credit Card Debt
The first step when negotiating your credit card debt is to take a close look at what you owe, list all your creditors, and check the amount you owe them. You can call your credit card issuers to verify the exact amounts, including the interest rates you’re paying on each card.
Once you have the numbers, you can check which debts are costing you the most money and organize them according to priority.
2. Schedule An Appointment With Your Debtor
If you’re struggling to make monthly credit card payments, it might be time to sit down with your debtor and negotiate a payment plan. By doing this, you can work out a plan that works for both of you and hopefully get your debt paid off more quickly.
When negotiating with your debtor, be honest about your financial situation. You can talk to them about what you are going through and discuss the solutions you have in mind with them. However, be reasonable and don’t go overboard with your requests.
As this is a negotiation, be ready for your debtor’s response and counteroffer. Be flexible and patient with discussing the debt settlement until you reach a common ground.
3. Check If You Are Qualified For Debt Relief
Debt relief refers to various measures used to refinance or reduce the debt a person has in an effort to make repaying easier for the borrower.
There are several types of debt relief, including debt consolidation, debt settlement, and bankruptcy. Each option has its eligibility requirements, which means that not all debt relief strategies are available for you.
To qualify for most credit card debt relief programs, you’ll need to demonstrate that you’re unable to repay your debt. This can be done by showing proof that you’re behind on your payments and have low income or high amounts of debt compared to your income.
4. Consider Asking For A Lower Interest Rate
One option you may want to consider is asking your credit card issuer for a lower interest rate. Many people hesitate to do this, thinking their issuer will say no. However, it’s worth a shot — you may be surprised at how easy it is to get a lower rate, especially if you’ve been a good customer.
There are a few different ways to ask for a lower interest rate. One is to simply call up your issuer and ask. You may also be able to do this online through your account management portal.
For better results, be polite and direct when you make a call or send a request. Explain that you’re having difficulty paying off your balance and ask if there’s any way they can lower your interest rate. Having a specific rate in mind is also a good idea, as it can open a healthy discussion between you.
Take note that there’s no guarantee that your issuer will say yes, but it’s definitely worth a try.
5. Get Everything In Writing
When dealing with your credit card issuer, it’s important to get everything in writing. This includes any promises or agreements made during phone calls or online chats.
If your issuer agrees to lower your interest rate, make sure to get this agreement in writing before you make any more payments. The same goes for any other type of agreement, such as a payment plan.
Writing everything down will help to protect you in case anything goes wrong. It will also give you a paper trail to refer back to if necessary.
6. Ask For Credit Professionals’ Help
A credit professional can help you identify the best way to repay your credit card debt. They can also offer advice on improving your credit score and managing your finances in general.
If unsure where to start, consider contacting a credit counseling service. These organizations can help you create a debt repayment plan and provide other financial counseling services.
There are also several for-profit credit counseling and debt management companies that can help you get out of debt. However, be sure to research any company you’re considering working with to make sure they’re reputable and have a good track record.
Final Thoughts
If you’re struggling with credit card debt, there are a number of options available to help you get out of debt. However, you should be wise in finding the most beneficial strategy for you. It’s important to understand each option’s qualifications so you can choose the best action for your situation.
Alleviate Financial offers expert assistance if you need to negotiate your credit card debt. With over ten years of experience in this field, you can rest assured that our experts will help you make the right choices for financial stability. Give us a call to get started today!