You can negotiate with creditors
It may seem impossible. After all, credit card issuers are big and rich . . . and you’re anything but that. Nevertheless, you can at least try to work with your credit card company (or companies) to decrease your debts.
Take it a step at a time. You have nothing to lose except a few minutes on the phone, and you could have a lot to gain.
Video: Negotating with Your Credit Card Company is Easy
A few tips to get you started
If you have missed or are going to miss a payment, get on the phone and proactively say so. Don’t wait for the company to come to you, perhaps by way of a debt collector, and allow unnecessary damage to be done to your credit score.
Talk to the right person. Don't tell your whole story to the first customer-service rep who answers the phone. Get the name and contact information of the accounts-payable person or the account manager. Listen carefully and take notes.
- Mind your manners. Everyone wants respect and courtesy. No matter how frustrating the conversation may become, don’t lose your cool. Don’t threaten to file bankruptcy if the creditor doesn’t work with you. However, if things turn sour despite your calm demeanor, don’t hesitate to state that you will consider closing the account.
- Know how to say it. The lingo of the credit card world may sound strange and confusing, but you can pick it up. Here are some terms that you should become familiar with:
- Amortization: Reduction of the value of an asset by prorating its cost over a period of time.
- Annual Percentage Rate: The interest you must pay if you carry a balance on your card, take a cash advance or transfer a balance.
- Credit counselor: A professional who offers advice on managing money.
- Credit score: A number developed from a credit bureau’s analysis of factors including your payment history, how much you owe, the length of your credit history, how many credit cards you have and other types of loans you have taken out.
- Debt consolidation: The replacement of multiple loans with a single loan.
- Debt management plan: A program designed to help consumers with their finances, such as negotiating debt-repayment terms with creditors and debt consolidation.
- Debt negotiation: A borrower-creditor agreement allowing the borrower to settle debts at a lower amount than is actually owed.
Video: Secrets of the Credit Card King
Mistakes to avoid
Your conversation with the creditor could easily fall flat if you aren’t prepared. And it could go nowhere toward getting you to your goal if you don’t follow through. Two mistakes to avoid are these:
- Not having the facts. Before the call, bone up on the details of your situation. Know the terms and conditions -- fees, surcharges, taxes, and interest rates -- of your debt. This will help you understand what you can ask your creditors to do.
- Not putting all correspondence in writing. Agreements made on the phone are difficult to substantiate. Make sure you have documentation. When the conversation is over, send a letter of confirmation that reiterates the main points of the discussion and the agreements reached. You’ll be able to refer to it later if a disagreement arises.
Major credit card issuers and their customer-service phone numbers:
AccountNow
(866) 925-2036
American Express
(800) 528-4800
Bank of America
(800) 242-6806
Chase
(888) 868-8618
Citi
(888) 201-4523
Delta Airlines
(800) 528-4800
Costco
(800) 955-7070
Discover
(800) 225-5202
First Premier
(800) 987-5521
JCPenney
(800) 527-4403
Pulaski Bank
(800) 264-7814
Simmons First
(800) 272-2102
Starwood
(800) 519-6736
Wells Fargo
(800) 694-0259
WorldPerks
(800) 953-7392
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