Negotiating Settlements with Credit Card Companies

Advertising Disclosure

Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Building Credit History » Negotiating Settlements with Credit Card Companies

Negotiating Settlements with Credit Card Companies


Updated: December 26, 2012

Add to Favorites:
Dealing with credit card debts can be very pressurizing and challenging, especially if the minimum amount due cannot be paid in time and you miss the due dates for lack of funds. Most people consider filing a bankruptcy if the minimum amount due exceeds their monthly funds for repayment. Bankruptcy should only be considered as the ultimate last resort because it can hurt you in more ways than you can think of. Bankruptcy will be in your financial records for a complete ten years. This means that, even after you recover from your bankruptcy, your records will hold it against you, for almost all financial dealings. You will not be able to obtain loans for property or even get new car loans or credit cards with bankruptcy in the record. There is one more option to consider before you think of bankruptcy; negotiation with your bank or credit card company, for the one-time loan settlement. Most of the credit card companies have the unsecured loan system which means that, apart from your agreement with them, they do not have any security if you cannot repay the loans. If you file for bankruptcy they do not have anything to confiscate in order to settle the loan. So the chances are high that the loan amount that you owe to them is completely absolved. To avoid this loss for the credit card companies, they will agree to an amount much lower than what you actually owe, if you are able to explain the situation to them and settle in for an amount. You can settle in for 50% of the total cost and an interest free repayment period, or even lower amounts in you are considering a one-time payment. It takes deliberation and time to reach this consensus with your credit card company since they will try to recover as much money as possible from you in settlement. Try to find another source for borrowing the loan if you are trying for a one-time settlement. Relatives and friends can come to your rescue if they can lend you money for a less interest, which you can repay back in a longer repayment time frame. If you can convince the credit card company that you are cashing in on every source of money you have and they are not going to get any more recovery amount from you, you can settle in for a good deal. If you opt for a repayment option that involves paying back in installments, then you will need to make sure that you get it completely interest free, otherwise there is no point in going forward with the settlement option. If you are not very good at negotiations, then you can hire an organization that specializes in making these deals. Credit card debt settlement has some drawbacks too. It can affect your credit scores and cause it to plummet down to really low levels. These settlements remain in your history too, but not as long as bankruptcy does. So taking this option is worth a shot, especially if you are thinking of filing a bankruptcy.

All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products’ Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Top 5 Cards for Travel from Our Partners Autumn 2017 – Expert Choice

Top 5 Cards for Travel from Our Partners Autumn 2017 – Expert Choice

Posted: November 8, 2017

Nights are drawing out, the wind is colder every day and you already feel the lightest breath of winter on your face - autumn is here. Holidays are over, kids are back to school and all you are left with are hefty holiday bills that you ... Continue reading
Autumn 2017: Best Rewards Credit Cards for Thanksgiving Shopping

Autumn 2017: Best Rewards Credit Cards for Thanksgiving Shopping

Posted: November 2, 2017

Thanksgiving is coming, and whether you are hosting a meal or coming as a guest, your spendings are going to accumulate faster than you can notice. A holiday feast is a costly matter – each year Americans spend around $50 on a Thanksgiving ... Continue reading
Balance Transfers Within The Same Bank: What You Need To Know

Balance Transfers Within The Same Bank: What You Need To Know

Posted: November 2, 2017

Transferring a credit card balance from a high-APR card to a card with a zero-interest promotional rate is one of the best ways to pay down debt. But many people have questions about how to do it. Specifically, some folks wonder whether ... Continue reading