Are Your Credit Card Terms Negotiable?by Talbert Williams The average household in America now carries nearly $10,000 in credit card debt, a figure that will probably continue to rise as the economy struggles. People use their credit cards during good times and bad, but during bad times the bills tend to get paid in full less often. The costs of maintaining that $10,000 balance can be quite steep, especially with some credit card interest rates exceeding 20%. In the current economy, with many people either out of work or underemployed, many families struggle to make the minimum payment on their credit cards each month, which amounts to at least 2% of the outstanding balance. Recently passed bankruptcy legislation will soon make it more difficult for those who are struggling with their bills to file for bankruptcy. What can you do if you cannot pay your bills and you cannot or do not want to file for bankruptcy? You could try negotiating with your credit card company. Depending on your credit history, current balance, payment history, and the interest rate on your credit card, you may be able to negotiate with your credit card company to improve the terms on your account. The easiest thing to do, particularly if you have no history of paying late, is simply to call your credit card company and ask them if they will lower your interest rate. With competition among credit card companies rather fierce these days, you can simply tell your credit card company that you have received a better offer in the mail and that you may cancel this account in order to accept the more favorable one. Under these circumstances, they may agree to lower your rate. If you have a history of paying late, you are probably out of luck. That may be ironic, since paying late is probably what has caused your interest rate to be high in the first place. Still, its worth a phone call, as the worst they can do is refuse. If you regularly pay your bills on time, lowering your interest rate is probably all you can do to improve your situation with your credit card company, as they tend not to be too sympathetic towards customers that pay promptly. If, on the other hand, you are at least three months behind and are carrying a large balance, you may have some additional negotiating leverage. That sounds rather contrary, but the credit card companies do worry about being paid by their customers with payment problems. They might be willing, for instance, to settle your debt for less than the amount of your balance if you agree to pay your debt all at once. You may be able to arrange a lump-sum payoff on your balance for less than you owe. Granted, this requires that you have the available cash, but if you can arrange to do so, you may benefit. The credit card companies would much rather settle a debt for less than the full amount than send the debt to a collection agency. This type of settlement is not without its own complications, however. What if you dont have the money to settle all at once? Thats likely, or you would have been paying your bills all along. Worse, settling for less than the full amount will show up as a negative entry on your credit report, and it will stay there for seven years. Your credit card company may or may not be willing to work with you on a payment plan. The details will be determined by your payment history, interest rate, balance and a number of other factors. It doesnt cost you anything to call them and ask them, and it may be less expensive for you to negotiate with your credit card company than it is to hire a debt consolidation agency. If you have a substantial credit card balance and you cannot make your payments, calling your credit card company is worth a try. Talbert Williams offers debt consolidation referrals and advice. For more information, articles, news, tools and valuable resources on debt solutions, visit this site: http://www.1debtfreedom.com
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