Running up a huge credit card bill is unfortunately something that tends to happen very quickly and very easily in many cases and can leave the person holding the credit cards in a very tight financial squeeze.Â When financial problems occur that cause you to not be able to keep up with the ever increasing credit card bill it may be time to consider negotiating a payoff, and itâ€™s usually better to do this before you damage your credit too badly.
Before we look at how to do that, keep in mind that you can certainly do this even if youâ€™re not in dire straits but the major credit reporting agencies will look at every negotiated payoff as a settlement which in fact can still damage your credit.
If you suddenly find yourself unemployed or unable to work the 1st thing you should do is call all of your credit card companies and explain the situation to them fully. They will be more willing to work out a settlement if they believe that you arenâ€™t making enough money to pay them.
When you call you should answer as honestly as you can any and all of their questions, which will help them to assess your financial â€˜pictureâ€™ in full.Â While theyâ€™re doing this donâ€™t be too quick to jump at the first offer they make.Â In fact, wait for their offer and then tell them that youâ€™ll have to think about it and get back to them.
If it looks like you donâ€™t have any resources at your immediate disposal they will probably make you an offer that is significantly lower than the outstanding balance that you have on your credit card. No matter their offer however you should give them a counter-offer that is about 25 to 40% lower. Donâ€™t worry about offending anyone as the people youâ€™ll be dealing with are used to this sort of thing.
Once the offer is agreed upon you will definitely want to get it in writing before you make any sort of payment. It isnâ€™t unheard of for a credit card company to take your settlement payment and then send you a bill for the rest.Â If you donâ€™t have their offer in writing youâ€™ll really be nailed.
Finally, before you finish the negotiations process see if the credit card company will also remove the bad credit rating or report from your credit history.Â Itâ€™s probably not going to happen but you never know.Â Good luck!