Credit Card Debt Negotiation

If you are finding it increasingly difficult to pay your debts, it's time to think about credit card debt negotation.

Upon finding yourself in a financially tight situation, your best course of action is to act quickly. Let's get real here. Short of coming into an inheritance or winning the lottery, your situation is not likely to suddenly improve.  It will, in all likelihood, get worse.

You may think that missing the occasional credit card payment will go unnoticed by your creditors, but that is not the case. Nowadays, credit card companies, banks and other financial institutions use special computer programs to alert them once a payment falls overdue. Just because they don't contact you immediately does not mean they are in the dark about you not having paid. If the debt goes unpaid you will hear from them, no doubt about it! 

Given that this is the case, it's far better that you initiate contact with them and explain that you are having difficulty making the required payments. This will let them know you are not about to skip out on your debt and you will be more likely to receive a sympathetic response to your plight. That is not to say they will release you from making further payments, but they will definitely be more open and flexible towards hearing you out and negotiating a new monthly repayment plan if you approach them early in the piece rather than wait for them to approach you.

Before phoning the credit card company, write down all of your debts and work out which you can afford to pay in full and which you can only afford to pay in part. If you cannot afford to pay any due to a temporary circumstance such as being laid off from work and you have since found a job, ask about a credit card payment break. Your request will usually be met favorably, but only if your situation truly is temporary. In other words, don't tell the credit card company you have found employment if you haven't. If you then fail to find work this will only serve to work against you when you are unable to meet your payment again the following month.

When you phone, ask to speak with someone who is in a position to discuss and approve your proposal. This will save time and allow you to talk with someone you can work with to come up with a new repayment plan. While they may not agree to everything you propose, most creditors will be open to negotiation. They want to be paid, and they would prefer not to have to resort to putting the case in the hands of a debt collection agency or taking you to court. Both of these options will cost them money, so are something they would like to avoid.

When you settle on a new payment plan that is acceptable to both you and the credit card company, ask for a copy in writing. This way both party's will know where they stand. Don't agree to a repayment plan you will not be able to meet. Your account will more than likely be monitored closely for some time, so it's important that you make your payments on time.

If you can't bring yourself to talking to the financial institution yourself, a debt counselor can speak on your behalf. Something to keep in mind though is that the lending institution will usually prefer to deal directly with the person concerned (in this case you) rather than a third person.  So phone yourself if you can.  The problem won't go away on its own, so it's far better to confront it head on.  The sooner you do, the sooner you will be able to work out a new payment plan and ease the financial stress in your life.