The Art of Negotiating Credit Card Debt

negotiating credit card debt Photo courtesy of alancleaver_2000

Negotiating credit card debt can be an important strategy when you feel that bankruptcy is becoming a bigger option. If you want to increase your chances to pay off credit card debt, keep reading.

The following article is a guest post that shares a few tips that will help you to make debts more affordable. Read the following ways to aid you in credit card debt negotiation.


Half the globe is neck deep in debt and the only way they find to come out of it is to file for bankruptcy. You must understand the negative effects of filing bankruptcy as it hampers your FICO score as well as your financial career. The consumers should try other alternatives like debt negotiation. You only negotiate on the outstanding amount owed but also on the interest rate as this helps you to achieve a debt free life.

How do you effectively negotiate credit card debt?

Know Your Rights

If you want to save yourself from fraud, then acquire knowledge on the rights the government has bestowed on you. The Fair Debt Collection Practice Act has been enforced by the FTC. It helps you to negotiate with the creditors. FDCPA can protect you from the unfair debt collection practice of the creditors.

Knowing the law helps in the process of negotiation with the debt collectors. You should be well accustomed with the pro consumer rights and the law implemented by the FTC. They prevent creditors from threatening you.

If you find that any creditor is violating the law laid down by the FDCP Act, then file a complaint at the attorney general's office for unfair debt collection practice by the creditors.

Evaluate the Total Amount You Owe

Negotiate to lower the total outstanding balance once you have evaluated the total amount of debt you have incurred. Avoid sending the creditors post dated checks and do not give permission to have automatic electronic payments withdrawn from your checking account.

Avoid Revealing Your Entire Information to the Creditors

Some information is purely personal, so avoid revealing it to the creditors. Do not expose your bank account numbers.

Keep Records

If the debt collectors try to threaten you, record the telephone conversation. Ensure that you fix a recorder with your phone. Inform the caller that the conversation has been taped and that it will act as proof while filing a complaint at the FTC's office.

You can dictate the terms of your negotiation once you let him know about the phone recorder. In addition, this can help you stop the threatening calls of the creditors. Now you can focus on getting help with debt rather than the harassment.

When negotiating credit card debt, always maintain a record of the documents like collection calls and collection letters. This is good practice for personal debt management.

Maintain Your Notes:

  • The time and date of each call
  • Name of the collection agency
  • The caller’s name and employee registration number

In order to get justice, you need to have enough evidence. The taped conversation acts as proof against the creditor harassment. You can place this evidence while logging a complaint before the attorney’s office.

Get a Written Agreement of the Payment Plan

If you have completed negotiating credit card debt, then construct a written document regarding the payment plan so the creditor does not alter the amount you decided at the time of payment. They won’t be able to change the payment terms as they would provide you with a written document.

Send the lender a certified copy of the letter where the detail of the payment plan has been elaborately described. Sending by certified mail only adds value to your letter and you receive a receipt with the delivery of the letter. Keep a copy of the letter as a record.

BONUS: Negotiate Your Credit Record

Make sure that the negative feedback does not hover on your credit record as that might hamper your credit score. Ensure that your account reads as “paid in full” instead of “paid in settlement”. Otherwise, it would have an adverse impact on your credit report.


Although bankruptcy is a last resort, it can act as a threat for your creditors. Instead, you can learn how to pay off credit cards the most efficient way.

But, if you file for bankruptcy, then the creditors will not get even a penny of the amount you owe. They would never want you to file bankruptcy. They would rather agree on a credit card debt negotiation on your terms as they would see a fine ray of hope of retrieving their money.

Author Bio

Negotiating Credit Card Debt is a guest post by Kevin Craig who is a financial writer. He has helped lots of debt burdened people with free counseling and advices on many finance related topics.

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