How To Negotiate With Your Credit Card Company: What Options Do You Have When It Comes To Credit Card Debt?

If negotiate credit card company is on your radar, this short guide cuts through the noise. Here is what is worth knowing, and how to put it to work today.

Key Takeaways

• SharePin80Tweet36Share7123 SharesFor many people in the United States the credit card is their only source for “backup cash” in case of an e...
• In fact last year The National Foundation for Credit Counseling found in an online poll that fully 64 percent of Americans would use a sourc...
• “Without adequate savings, consumers have poor resolution choices when an emergency arises,” said Gail Cunningham, spokesperson for the NFCC...

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For numerous people in the United States the credit card is their only source for “backup cash” in case of an emergency of some sort, be it an unexpected medical bill, a burst pipe in their basement or a need to replace an appliance. In fact last year The National Foundation for Credit Counseling found in an online poll that fully 64 percent of Americans would use a source other than their savings account in order to pay for an  unplanned $1,000 expense.  When those unplanned expenses do arise, they’re not left with a lot of good choices beyond using credit.

“Without adequate savings, consumers have poor resolution choices when an emergency arises,” said Gail Cunningham, spokesperson for the NFCC. “People frequently say they can’t afford to save, but the truth is that they can’t afford not to.”

Money magazine once stated that 78% of us will have a major negative event happen in any given 10-year period of time.  In other words, most of us are going to have a major negative event whether it be a health issue, a flood in our home or something else.  At our house we’ve had a few of these major negative events, with a hospitalization costing almost $250,000 (paid for by insurance) along with other various health issues.  We planned ahead with insurance and a 12 month emergency fund so we weren’t adversely affected.  Having a problem is a near certainty, so it’s key to prepare yourself for that eventuality.

But what if you didn’t plan ahead for whatever reason - or you weren’t able to save up an emergency fund in time before your major negative event happened?  What if you’ve already built up a bunch of credit card debt and are now having problems keeping up on the payments?  What are your options for negotiating that credit card debt to a lower amount, getting rates reduced or otherwise getting help from the credit card companies?

Quick Navigation

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• Dealing With Credit Card Debt
• Negotiate A Lower Credit Card Rate
• Working With A Credit Counseling Agency
• Debt Management Plans
• Debt Settlement
• Bankruptcy
• Conclusion

Dealing With Credit Card Debt

I’ve only had to deal with credit card debt a few times in my life. For the most part I’ve never had more than a couple of thousand dollars on my cards, and was able to pay them off in a relatively short time frame.   I’ve had family and friends, however, who haven’t been as lucky and have had thousands upon thousands in credit card debt racked up due to medical bills, property taxes and other things.

Dealing with credit card debt can be a painful and demoralizing experience.  For a lot of people it is a scary process because there is so much confusing information out there about how to deal with the debt and work with the credit card companies (or others) in order to get the debts paid off, and they’re not sure what options are the best.

So what are some options when you find yourself deep in credit card debt?

Negotiate A Lower Credit Card Rate

One thing that I’ve learned over the past few years is that it never hurts to ask a company to help you out. Whether it’s asking your bank to remove an overdraft charge, your TV provider to remove a fee increase or negotiating a lower amount on your medical bills, it never hurts to ask.  In numerous cases it will save you a lot of money.

Negotiating a lower rate on your credit card isn’t always going to be successful, but if it is you could save thousands in interest, depending on what rates you receive and for how long.

Debt Goal has a tool called Negotiate My Rate where you can go to see what your potential savings might be from getting a lower rate, as well as showing you what success other people have had getting lower rates from certain companies.

Some things that you should do when calling to renegotiate your rate:

• Gather information on competitive credit cards:  Save a few of the best credit card offers you get in the mail with lower rates than your current card and 0% introductory offers.   Use these as a starting point for your negotiation, as a tool to get your own company to lower their rate - or risk losing you.  Make a list of all the offers.
• Call and ask for a supervisor:  While you don’t necessarily have to talk to a supervisor right away, you will want to ask if the rep you’re talking to is authorized to lower your rate.  If not, ask to speak to a supervisor.
• Always be polite and courteous:  As the old saying goes, you’ll catch more flies with honey than with vinegar. I’ve always found that I have better success getting what I want when I can be nice and get the rep on my side, instead of being threatening and angry.  
• Mention your history with the company:  Mention that you’ve been a good customer for x number of years, and that you’d like to continue being a customer.  If you’ve got a good payment and credit history, bring those points up.
• Ask them to match offers or rates from other companies, or match their own offers:  Ask the person with the authority to lower your rate if they will match the rate you could get with one of the other offers you’ve received and kept.   Ask if they have any promotional rates you can take advantage of.   Ask what you would need to do to qualify for a lower rate, and if you could qualify later.
• Ask about hardship or workout programs: If you’re really struggling to make payments you can ask about any hardship or workout programs that they have available, and whether you would qualify.  Your rate reduction may be even greater if you qualify, but sometimes you’ll also be required to close the credit card and convert your debt to an installment loan with direct pay from your bank.  Other times the rate reduction is temporary.

One thing to remember is that you may have to call and ask for a reduction more than once.  Be persistent.

Questions To Ask

Negotiate My Rate offers some constructive questions that you can ask your customer service rep if they’re not willing to offer a reduction right away.

• “Are you authorized to lower my rate?”
• “Are there other people who have the authority to lower my rate? May I speak with them?”
• “Do you have a promotional rate that I can take advantage of?”
• “What would I have to do to get a lower rate? Can I call back later when I meet those criteria?”
• “Can I qualify for a hardship program?”

Sometimes you may not be successful in getting a lower rate with your current company. In such a case you may want to consider transferring your balance to another card if you can find a good offer.  Just be sure to take into account whether or not they have balance transfer fees, as fees can seriously eat into any savings you may see.  Also know the terms of your new card as well, and how long promotional rates last.

Working With A Credit Counseling Agency

Sometimes you may not be able to get a rate reduction on your own, and you may be better off working with a credit counseling agency.

I recommend working with the National Foundation for Credit Counseling to find an accredited non-profit agency that can help you come up with a good plan for dealing with your debt.  Steer clear of for-profit companies or those who charge outrageous fees upfront before settlements are made.

A credit counseling agency can help you to figure out what is the best course of action for

Final Thoughts

Before you check out, double-check negotiate credit card company against current offers and any coupons you can stack. Small habits like this add up to real savings over a year.

Originally published at biblemoneymatters.com.