Posted on January - 26 - 2011
DIY debt management: Tips for negotiating credit card debt
Long after the holidays have passed, you may find yourself paying off credit card debt. The problem with credit card debt is its high expense and making minimum payments can take years to eliminate your credit card balances. Worse, if you lose your job or become ill, it can become impossible to make any payments. It takes very little time for an unplanned event to trash your finances and ruin your credit.
Credit card debt: Finance charges, account terms hinder debt reduction
Fine print, volumes of paper and busy lifestyles contribute to not knowing credit card terms and costs. A good starting point for a debt management plan is to make a list of all credit card accounts, their balances and the annual percentage rate (APR) for each account. The APR includes interest and penalty fees for your account; the APR can change according to the interest rate and status of your account. Some credit card companies assess penalty fees or raise interest rates if you make late payments. The higher your APR, the more money you’re throwing away. If you can’t pay off your credit card debt within a couple of months, contact each company and ask for a reduction in the card interest rate and a waiver of fees incurred on a one time basis. Credit card debt settlement options don’t usually include reducing balances unless you’re several months delinquent and ready to file bankruptcy.
Negotiating with credit card companies: Mind your manners and lose the expletives
Tips for negotiating include:
- When calling credit card companies, have your credit card number handy, along with the APR you’re currently paying. Write down pertinent details including your current balance and how long you’ve had the account; this can be helpful when requesting lower rates or fee waivers.
- Dealing with customer service personnel who answer calls and respond according to scripts rather than attempting to address your requests can be frustrating, but it’s important to keep your cool. Don’t swear or raise your voice. If a customer service rep says they cannot help you, ask to speak with a supervisor.
- Don’t close your accounts. It’s easy to tell credit card companies to take their cards and…well, you know, but closing accounts reduces the amount of credit you have available, and raises your credit utilization ratio. A higher credit utilization ratio can lower your credit scores.
Maintain civility, hang up quietly, and seek credit counseling and debt consolidation help from a credit counseling service.
Similar Posts:
- How Can I Reduce the Rates on My Credit Cards?
- New Credit Card Legislation for US in 2010
- Credit card debt: Applying CARD Act principles to personal debt
- Credit Counseling and Debt Consolidation: Finding Help on Your Credit Card Bills
- Use Smart Credit Management to Increase Your Credit Score
