Negotiating Your Credit Card Debt

Negotiating your credit card debt is not as simple as saying, “I want to negotiate my credit card debt.” It’s a good start, but it takes much more work and probably a few phone calls to straighten out your situation. You need to know who you’re talking to, when you’re doing it, and a written statement when it’s all said and done.

When you call your credit card company, you will get a customer service rep on the other line. There’s a possibility this person will not be qualified to change the amount of debt you owe, so you need to specifically ask for someone who handles settlements or workout arrangements. The specific name of the department in the credit card company might not be the same with every company, so ask an either/or question, such as “workout program or mitigation department.” Whatever the name of the department, you will want to deal with them if you want to negotiate for a smaller amount. Once you get someone in the specific department, you’ll want to get the employee’s name, ID number, and telephone extension, since you will have to make a few phone calls during the entire process.

The timing of your phone calls is important, too. Unpaid debt will typically be moved to a delinquency department after 90 days, and the debt gets removed after 180 days. The company could pursue legal action after 180 days, so don’t wait too long. However, negotiating too soon may be a bit suspicious to the company (and the debt might not be that large, anyway). The only time you want to negotiate your debt is when you have to, so this window of three to six months is the optimal time to do so.

When you make your phone calls and build a basic rapport with the reps, explain your situation. Maybe you just lost your job or you’re going through a divorce. Whatever has happened, you can’t pay the entire amount. You are able to pay some of it, but not all of it. Inquire about a possible reduction in your interest. If you are considering bankruptcy, you need to let the department know. Whenever you get a final plan, you need to get it in print. Get it in writing so you can see what you are paying, of course, but there are other reasons. The people you negotiated with may have switched jobs after the debt is settled, the name of the bank may have changed from a merger or being bought out (Wachovia will become Wells Fargo soon, for one). There could also be typos in the information report to the credit bureaus. You need the final product in print so no further legal action is taken.

These are the three main factors to help you negotiate your credit card debt. Just remember to be patient, and don’t be afraid to ask questions.

David Pilley

David Pilley

David Pilley is a May 2010 graduate of the University of North Carolina at Chapel Hill, with a B.A. in communication studies and a creative writing minor. He is a native of Raleigh, North Carolina.

He played clarinet for the Marching Tar Heels in 2005 and 2006. He also volunteered for STV, the student-run television station at UNC-Chapel Hill, in the spring of 2010. He shot video, wrote scripts, and acted for “Off the Cuff,” UNC’s longest running sketch comedy show. He has the rare distinction of having lived in a dorm all four years of his undergraduate college career. He was also on Franklin Street on the night of April 4, 2009. His future plans are to pursue a master’s degree in journalism and to one day work for the media as a sports journalist or broadcaster.

Being one of eight children, David realizes finance is an important topic to everyone, regardless of his/her knowledge of the subject. His interests are in personal finance, budgeting, and savings.

In his spare time, David enjoys watching sports and standup comedy, as well as doing crossword puzzles and writing in the first person. He also thoroughly enjoys trivia and, one day, hopes to participate on the game show Jeopardy!, where he will try to break Ken Jennings’ 74-game win streak.
David Pilley

Latest posts by David Pilley (see all)