How to Negotiate A Credit Card Debt Settlement Yourself

How to Negotiate A Credit Card Debt Settlement Yourself

Table of Contents

Oh my God!
Your credit card debt is now more than you think you can bear and it has grown too high. You think you should stop the credit card debt. You’re right. You should stop it now.
Before you pay off the debt with one lump sum of money, read this article. It is helpful, because, it shows how to do it flawlessly. It tells how you can superbly get rid of your plastic debt and how to negotiate a credit card debt settlement yourself.

5 Steps to Settling A Credit Card Debt

As we proceed, you’ll be shown six steps and at the end of this section, you will know how to negotiate with the credit card company faultlessly.

So, let’s begin with the steps.
Know How Much You Owe: For multiple credit cards, access your statement. Understand how much you owe with their respective interest rates. Also, note the customer service contacts. Have all those information in a place right before you as you will need them as you are proceeding in the call with the latter.

Explore the Settlement Options

Before calling make sure that you have explored your options and have understood them properly. Don’t be in a haste. Be sure of the amount of money you can pay. Check if it won’t affect your credit score. Check if there are no tax implications as you really do not want to do a step bigger than yourself.

The common credit card debt settlement options are:

  • Debt Settlement
  • Hardship Plan
  • Lump-sum settlement
  • Debt management

As we proceed, each is explained in a detailed manner.
Let’s begin.

Debt Settlement

What does a settlement mean? It’s the amount of money you want to use in order to pay off your plastic debt and it’s always less than the plastic debt you owe.

After making your cc company agree with your settlement, you can opt for a debt settlement arrangement. With this arrangement, you will pay a monthly amount to a debt settlement company.

The company keeps your money in an account. When your monthly payments accumulate up to the settlement, the money is withdrawn and your creditor is paid with the fund. It’s just that simple but this includes the debt settlement service fee. And the associated fee can be a disadvantage. Also, bear in mind that a debt settlement arrangement can have a detrimental impact on your credit score and as a result, it is the last option to turn to.

Hardship Plan

Humans can be merciful. Credit Card Companies also are. Your cc company can put you on a hardship plan but that can happen only if you had a job loss or a critical illness that is responsible for your financial hardship.

The hardship plan is lenient as it reduces your plastic minimum payment with its interest rate and fee. This way includes a structured payment plan. So, in case you experienced any financial problem or health issue, ask your credit card company for a hardship plan.

Lump-sum Settlement

Let’s explain the credit card lump sum settlement. This arrangement works on one condition. That’s if you have a significant amount of cash to pay the debt upfront. The company can reduce the debt to the exact principal you owe.

Debt Management

Non-profit organizations can help you to manage your debt. Don’t get me wrong as they won’t pay off your debt. You do it but they will make it easier. This is also how to settle the debt. They are just credit counselling agencies.

They work with you and your creditors and help your financial plan. You will need to deposit money to them each month which of course they will use to pay off your creditors. As usual, there’s a fee and you have to meet some requirements. A qualification requirement like the fact that you can ensure the repayment of the debt within 60 months.

Workout Agreement

Some money comes in but not enough to meet the current monthly payment. Arrange a workout agreement. With it, you can get your minimum monthly payment waived or reduced, lower your interest rates, and delete everything past the last fee.

Let’s us move on to the next step.
Identify the risks: Every option is risky. Identify these risks and understand them. But most importantly keep in mind that your financial stand dictates the best option. In spite of that, know the risk you’re about to take.

Let take them one by one.

Lump-sum Settlement

A lump-sum settlement can also lower your credit score. This depends on your credit card company’s report to the credit bureaus. Reports like “SETTLED” or “CHARGED-OFF” would affect the borrowers. While reports like “CURRENT” or “ACCOUNT CLOSED” may not affect a person’s credit score while a forgiven debt attracts tax implications too.

Hardship Plan

It also affects your credit score and that also depends on how it is reported to the credit bureaus. It’s a deferred debt so, you are the one paying.

Debt Management

This doesn’t affect your credit score but on your credit history there will be a mention that you enrolled in a debt management program and that’s a financial stigma.

With a debt management, you get the least effects on your credit score, because creditors often trust a credit counseling agency more than a settlement company. Besides, settlement companies take a huge fee for the service.

Phone Your Credit Card Company

Although a settlement company can do this for you, you can still do it and save some money! Do it yourself. Be confident. You’re a grown-up and it’s your financial life. Prepare a script. Frame your request and make the phone call.

When asking, seek the debt settlements or the collections department. Your financial situation is crucial so make sure that you put it into words. Explain in details your situation. Know what you exactly want and ask for it. The reply may be no. Try again, again and again. Let it take multiple phone calls before going forward.

Put on record every call and document and every conversation. Jot the receiver’s name and his job’s title. Do that every time you call. Doing so will help you reference any of them in the follow-up calls.

Get A Written Deal

Do this when your credit card company is ready to negotiate. Get the deal terms written down to a legal paper. A verbal agreement is not a binding one most of the time. Anybody can leave the company and that may be the credit card manager you spoke with. Only a paper agreement protects you and your rights forever..


This is article shows you how to negotiate your credit card debt with your card company. It shows you how to pay off debt fast with a low income and that means taking out personal loans online. It does that by exploring five steps. It shows different approaches that can be taken and how risky each is while also mentioning how to mitigate the risk.



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