Credit Card Debt Negotiation
Learn how to negotiate effectively with your creditors so it’s easier to achieve your repayment goals.
Credit card negotiation can help you accomplish any number of things — it all depends on your needs. You can negotiate for better terms on your credit cards and make special arrangements with your creditors when you need to get back on track. Good negotiation tactics and the right strategy are required to be successful, but the benefits can be huge.
If you need to negotiate with your creditors but are concerned you may not be successful on your own, the tips on this page may be able to help. If you still have questions or concerns, call us today at to speak with a certified credit counselor.
Establishing Goals for Credit Card Debt Negotiation
Before you call any creditor to begin negotiating, you must have a clear idea of what you wish to accomplish during the conversation. Credit card negotiation doesn’t have just one conclusion; what you negotiate to receive varies depending on your financial needs. You can:
- Negotiate to lower your interest rate if you are a customer in good standing
- Negotiate for the removal of penalty fees and penalty interest charges when you fall behind on payments
- Negotiate to “re-age” a delinquent account you have brought current on your credit report so the credit report penalty is removed
- Negotiate to get a temporary adjusted payment schedule if you are struggling to make the required payments on your account
Your negotiation goals may not necessarily be the same for every credit card account you have. You can negotiate with as many or as few creditors as you wish in order to accomplish the desired financial results.
Tips to Help You Negotiate
Even with clear goals mapped out for negotiation, you may still encounter significant resistance and pushback from the creditor once you start the conversation. The following tips can help you be more successful in learning how to negotiate with creditors:
- In addition to a clear goal, make sure to have an accurate household budget on hand during the negotiation to help you make your case.
- Be calm and to the point in your negotiation.
- Never let emotion get in the way.
- If you have been a responsible debtor who simply got into a temporary bad financial situation because of some outside force like a recession or unemployment, make sure to use that as a negotiating point during the conversation — especially if the goal in your negotiation will help you get back on track with that creditor.
- If the first representative you speak with refuses to negotiate, you may wish to thank the representative for their time, hang up and try again later with a different representative.
- If negotiation fails with one creditor, don’t give up. You may be able to successfully negotiate with your other creditors to get the benefit you need.
- Don’t be opposed to compromise, but don’t compromise so much that you don’t get the benefit you want.
This last point can be confusing to people, because there is no absolute right or wrong answer for how much you should compromise. It’s all a matter of what you wish to gain from the negotiation and what you can afford to lose. For example, if you need to arrange a temporary adjusted payment schedule (also called a workout schedule) the creditor may wish to lower your credit limit as well. Generally this would be an acceptable result because you get the reduced payments you need while giving the creditor some assurance that you’re serious about getting back on track.
However, let’s say you are negotiating to reduce the interest rate that’s being applied to your debt. If you want to achieve a certain target interest rate during negotiation to accomplish your goals, compromising for a lesser rate adjustment may not provide the benefit you actually need. Even though the creditor agreed to reduce the rate, you could have compromised to the point that you lost sight of your goal.
What to Do If Credit Card Debt Negotiation Fails
If one or more of your creditors refuses to negotiate or won’t accept the terms you offer, you aren’t stuck. You can still get an expert on your side.
Much of what you can accomplish with credit card negotiation on your own is in line with the benefits of a debt management program. A debt management program can reduce the amount you pay each month and decrease the interest rate currently applied to your debt. What’s more, your credit counselor may be able to negotiate with creditors on your behalf to have penalties removed and accounts re-aged on your credit reports. So, if you’re struggling with debt and in a situation where credit card negotiation won’t work, you can get the same benefits from enrolling in a debt management program.