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

By
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.

Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Interest Free Credit Cards: Pay No Interest Until 2019

Interest Free Credit Cards: Pay No Interest Until 2019

By Credit-Land, Posted: May 23, 2017

Carrying a balance on a credit card is wasting your money on interest fees. It is easy to avoid interest payments on purchase transactions by paying off the entire card balance by the due date each month. But what to do if you are already ... Continue reading
Dashlane: Password Management and Shopping Ease in One Simple Product

Dashlane: Password Management and Shopping Ease in One Simple Product

By Angela Rose, Posted: May 3, 2017

Are you terrible at remembering passwords? Are you so terrible, in fact, that you often use the same one for multiple websites? If so, you’re not alone. Continue reading
SoFi Making Lending Social

SoFi Making Lending Social

By Dar Dowling, Posted: April 26, 2017

Since 2011 SoFi, a San Francisco based online lending company, took the lending industry by storm, when they became the first online lender giving people access to affordable student loan refinancing. Continue reading