How to Negotiate on the Credit Card Balance Payoff

If you are experiencing financial problems, you may find that you are no longer able to make the monthly payments on your credit cards. You may fear that you will end up in court or be sued if you can not make your payments, but in some cases credit card companies may be willing to negotiate a payoff on the balance that you owe, instead of pursuing legal action against you. Although this type of payoff can damage your credit and will appear on your credit report for a number of years, it can often help ease the financial burden and keep you from having to file bankruptcy.

• 1

  Review your finances to see if you can offer the credit card company a lump sum to pay off the debt. You can generally save money if you can pay a settlement amount all at once and close the account, instead of negotiating to make payments.

• 2

  Call the credit card company to discuss your financial situation with them. Prepare to explain your situation to several different people until you reach someone that can actually assist you.

• 3

  Offer to pay 15 percent of what you owe if you have the money available. Start your payoff negotiation on the low end to see if the credit card company will make you a counter offer. Expect their offer to be somewhere between 25 to 40 percent of what you actually owe.

• 4

  Ask the credit card company to lower your interest rate. If you are not behind on your credit card payment, the company may refuse to let you settle the account by paying it off with anything other than the total amount that you owe. When this is the case, a lower interest rate can help lower the amount that you pay each month.