Credit card debt can creep up on you like a spare tire around your waist during the holidays. If your "financial fat" has grown to the point where you're having trouble making your monthly payments, you can try to negotiate with your credit card companies. A few tips can help improve your chances for a successful negotiation.
Don't Wait Too Long
The sooner you contact your credit card company about your situation, the better your chances of negotiating successfully. Typically, credit cards will not negotiate with you until you've fallen behind on your payments. The best time to negotiate a settlement on the amount of your outstanding balance is usually when you're at least 30 to 90 days behind. Keep in mind that after six months your account will likely be sold to a collection agency for pennies on the dollar and you may not be able to directly negotiate with your card company at all.
Make Your Case
The worse your financial situation, the better the chance your credit card company will be willing to settle. Prepare a brief written financial statement listing all your income, assets and liabilities and mail it to the company. Once the company sees that making regular payments on your card is difficult if not impossible, it may be more willing to take what it can get.
Make the First Offer
Be prepared to make an offer when you contact your credit card company instead of waiting for it to make one to you. If you've already sent your company a financial statement showing that you can only afford to pay $200 a month, for example, you'll be able to justify the amount with your documentation. It can be an effective negotiating tactic to offer slightly less than what you can truly afford to allow room for the company's potential counter offer.
Seek Professional Help
If you're not comfortable negotiating with your credit card company on your own, you can always enlist the help of professionals. Nonprofit credit counseling organizations can provide you with information on how you can reduce your credit card debt or even negotiate with your creditors on your behalf. Be sure you're working with a nonprofit counselor and not a for-profit debt settlement company that charges a substantial fee for its services.