Reduce Credit Card Debt Without Paying Debt Settlement Companies

There are many options for consumers that want to reduce credit card debt. Some consumers choose to file for bankruptcy, while others request the help of debt settlement companies. There is, however, a third alternative for consumers willing to put forth some extra effort in order to save money and avoid a bankruptcy’s impact on their credit score – direct negotiation with the credit card company.

Credit Card Debt Negotiation Success

Credit card debt negotiation is most successful in certain circumstances. When these criteria are met, consumers are more likely to reduce revolving debt through negotiation with the credit card companies.

  • Be proactive for a better debt settlement offer – Request debt settlement before the financial situation becomes untenable. The credit card company is more likely to view the request favorably if time and resources have not been spent in an attempt to collect the debt. In addition, this approach is more credit-score friendly. Missing payments will have a negative effect on the consumer’s credit score, negating the benefits of avoiding bankruptcy.
  • Be persistent and polite for personal debt settlement plans – Consumers that negotiate with credit card companies must learn not to take “No” for an answer, while remaining polite and professional. If an unpleasant customer service representative refuses any offer, keep calling until a reasonable customer service person is on the line, and keep talking until a good plan is in place.
  • Be prepared to prove a willingness to pay off the debt – Consumers should know exactly how much they are willing and able to pay before calling to ask for debt settlement. Offer a lump sum payment of a portion of the balance, and reasonable monthly payments, to increase the chance of acceptance. Consumers should also be prepared to show the credit card company exactly how they plan to make future payments, with proof of income and employment.
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What Makes a Good Debt Settlement Offer?

The question of whether a debt settlement offer is “good” or not is highly subjective, and depends heavily on the consumer’s personal financial situation. At the worst, an offer that reduces or eliminates interest during the remainder of the loan terms, and reduces payments to an amount that the consumer can reasonably pay on a monthly basis should be acceptable. At best, the offer can significantly reduce a consumer’s revolving debt, and result in a faster payoff of the total personal debt of a consumer.

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