How to negotiate credit card debt

On Behalf of | May 24, 2023 | Bankruptcy |

Thousands of Florida residents struggle with credit card debt. That’s certainly no surprise as reports indicate that credit card debt is the most common type of debt among Americans. Many people don’t realize that credit card debt is negotiable, and understanding the process is helpful in managing credit card debt.

Why credit card companies negotiate

One of the most important aspects of debt negotiation is to understand why the other party wants to negotiate. Banks own most credit card companies, and their top priority is to make a profit. When they have reason to believe that someone can’t pay their debts, they typically become much more willing to negotiate as recouping some of the debt is better than recouping none of it.

Understanding your options

Before you begin the process of negotiating with a credit card company, spend some time reviewing your options. Some common repayment options include:

  • Lump sum payments
  • Workout agreement
  • Hardship agreement

Document everything

When negotiating a credit card debt, it’s a good idea to document everything. If someone from the credit card company tells you that they’ll agree to one of your repayment options, ask them to send you something in writing either through mail or email. Without this documentation, it’s impossible to prove that the company agreed to an alternate repayment agreement.

Know the disadvantages

Debt negotiation isn’t a free pass to get out of paying your credit card debt. One of the biggest disadvantages involves the negative impact that debt negotiation has on your credit score.

As of 2022, U.S. citizens owed more than $1.9 trillion in credit card debt. Debt negotiation can provide a viable option for individuals facing significant credit card debt.