Negotiate Lower Payments on Credit Card Debt

A high balance on a credit card can result not only from the charges an individual makes on the account, but also from high interest rates and fees that are applied to the card. Consumers have the option to negotiate these amounts with credit card companies in the hopes of lowering monthly payments on their credit card debt.

Ask For a Lower Interest Rate on Credit Purchases

The CARD Act requires credit card companies to provide consumers with 45 days’ notice before changing the terms of their original credit card agreement. If an individual receives notice that his interest rate is due to change, he has the option under the new laws to cancel his card agreement and pay off the debt under his original interest rate.

For individuals who do not wish to cancel their credit card accounts but also do not want a higher interest rate applied to credit purchases, there is the option to call the company and simply ask for a lower interest rate. An individual has a higher chance of success if he or she has an account that is currently in good standing with the credit card company. A credit card company can increase interest rates for a variety of reasons including:

A late payment by the consumerAn individual going over his or her credit limitA struggling economy that places all accounts at a higher risk of defaultA consumer making a late payment on any other account he or she holdsChanges in an individual’s spending habits

Negotiate a Lower Balance With Debt Settlement

An individual can attempt to negotiate a debt settlement agreement with the credit card company. A debt settlement agreement will permit the consumer to pay less than the full amount owed on the account and have the remainder forgiven by the creditor. Debt settlement agreements help consumers avoid defaulting on the debt (See Defaulting on Unsecured Lines of Credit).

Debt settlement agreements typically work best when an individual can offer a lump sum payment to satisfy a portion of the debt. Any consumer who negotiates a settlement agreement with a credit card company should be sure to get the terms of the settlement agreement in writing and signed by a company representative for his or her own protection.

The best way to make a deal for a debt settlement is simply to call the credit card company and ask to speak with a supervisor. Individuals should explain their financial situation and why a debt settlement agreement is necessary. Each company representative will react differently to a consumer’s request for a settlement. If one supervisor declines, an individual can call back and speak to another supervisor in the hopes of reaching an agreement.

Alternate Options for a Lower Credit Card Payment

If negotiating for a lower interest rate or a debt settlement deal are unsuccessful, consumers have alternate options to lower their monthly credit card payments.

Balance transfers – The credit card debt can be transferred to another card with a low introductory rate. This allows the consumer to pay off a greater amount of debt more quickly, thus resulting in lower payments when the low introductory rate resets to a default interest rate (See Consider Balance Transfer Offers Carefully).Personal Loans – An individual may opt to take out a personal loan at a lower interest rate that the credit card. The loan can be used to pay off a rapidly increasing credit card debt and then repaid at a fixed rate over time.Tax returns or savings accounts- A savings account or tax refund can successfully pay off credit card debt. The individual may then slowly build back the lost funds over time with the money he or she saves on credit payments.

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