Negotiating Credit Card Debt Yourself

By John Alexander - Jul 21, 2009

Did you know that is not very difficult to renegotiate the terms of your credit card debt? As a matter of fact, you can reduce monthly payments or even settle credit card debt. I'll show you what to do in this article, but first, I'd like to tell you a story about a woman named Jenny and how she was able to get yourself out of debt by negotiating with her credit card company. Jenny, like many students, struggled financially through college to make ends meet. She was introduced to credit cards on campus. A major credit card company had setup a booth at her school student center offering gifts for simply filling out a credit card company. To make a long story short, Jenny got into some credit card debt in college as a result as was in a weak position to pay them back. After graduation, she had around $6,000 in credit card debt, several negative remarks on a credit report, and a job that could barely meet her credit card obligations. Jenny's story is probably not too much different than your own story. Through life's circumstances we find ourselves in situations where we rely or even depend on credit cards to get us through. We are often stuck with huge amounts of debt.

So what know? There's some options. If you're in a situation where you have fallen behind on your debt obligations, you can negotiate a settlement. I know what I will say next will sound bad, but if you're at the point where you have a lot of negative remarks from credit card companies (you have bad credit) and you are financially unable to survive, stop paying and start saving. As long as you pay your credit card bills, even if you are several months behind, credit card companies will be more than happy, but you'll keep getting a worse credit score and always continue to be a slave of your debt. If you want to settle the your credit card debt, you are better off saving the money you would be paying your creditors for several months until you have saved a third of what your original balance owed was. At this point you should write a letter to your creditors offering to settle your debt at 25% of what was owed. Start low because it gives you room to increase your offer slightly.

When your credit card debt becomes delinquent for a certain period of time, the credit card company writes it off as a loss and hires a debt collection agency to try to recoup funds. They will harass you for a few months or offer a settlement amount. If they do try to harass you over the phone, simply ask them to cease and desist communication. The phone calls will stop. Since you have been saving money each month, you will not have cash on hand to use to settle your debt either through the collection agency or by dealing directly with your creditor. You must understand that a collection agency is simply a middle man. It is always important when collection agencies are contacting you about a debt to ask them to send a confirmation showing the exact amount and name of the creditors as well as date of the original debt.