Credit Card FAQ

How Do I Negotiate With Credit Card Companies?

27 December 2012 by CreditCardsCo™

Even responsible people can find themselves in financial trouble every once in a while. Credit card payments are often the first to be ignored by consumers but you do not have to avoid your payments if you want to save money. In fact, you can try to negotiate new terms with your credit card issuers.

It is sometimes possible to negotiate with credit card companies in order to pursue an agreeable set of terms if your personal situation changes. As a responsible credit holder you want to continue to paying your bills, but you may simply be having trouble and your credit card company understands this.

Everybody faces some financial trouble every now and again. Whether you lose your job, acquire a large medical expense or other expense, it is important for you to stay on track with your bills, and that includes your credit cards.

Whether you have gotten in over your head or you seek a little more breathing room with your credit cards, you should always consider negotiating with your credit card company. The credit card industry is a business and while the issuer of your credit card could pursue legal action and force you to pay your balances, they would still prefer to stay out of the court system and resolve your issues through compromise or creative problem solving.

Finding A Solution

The first thing you need to do is consider the alternatives that are available to you, especially if you are in the realm of legal action. There are a few avenues to investigate in terms of closing your account:

  • Lump sum, which is a single, negotiated, payment that you make to the card issuer either to close the account or to satisfy whatever issues that you might be faced with. Sometimes this payment can be broken down into installments.
  • Negotiate an arrangement with the credit card company so that they will still receive payment and you won't face financial ruin and legal action
  • Debt management programs can often help by doing the negotiating for you. They may be more aware of certain benefits or options
  • Forbearance programs can suspend your accounts for a certain length of time

Income To Debt Ratio

The options that are available to you are often determined by your income-to-debt ratio. This is a number that explains how you are able to pay your bills based on the amount of money that you make every month. The larger the disparity in numbers, the better "liquidity" you are assumed to have, and thus the better your ability should be to pay your bills. When negotiating a new deal, credit card companies take this number into consideration before determining what you need to pay.

Contact The Credit Card Company

Once you have taken all of these things into consideration, you are prepared to contact the credit card company. This is, by far, the most difficult step because you never know who you will talk to or if they will be willing to work with you. Typically, though, if you are persistent, it is quite likely that you will eventually be passed on to someone with the authority to make executive decisions regarding your account. If you are facing some difficulty you can always ask to speak with a credit manager directly because the customer service representatives who answer the phone probably will not have the answers you are looking for.

You should never be afraid of negotiation with your credit card companies. Although they are not responsible for the changes in your life, they are usually willing to work with you to find new options if you are facing certain financial difficulties.

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