With the economy suffering from the global credit crisis, more and more people are finding themselves in financial difficulty. The once booming economy has simply gone boom, or perhaps more appropriately, bust. One of the biggest fears on people’s mind at the moment is their credit card debt, which has continued to escalate during this economic downturn. The reality is that now many people are faced with the regrettable and unenviable task of trying to manage this seemingly impossible debt load. One of the first things that can be done is to contact the credit card company directly, and negotiate the current balance.

Step by Step Instructions on How to Negotiate With Credit Card Companies

1. Do Not Run and Hide. Too often we ignore the debt and the signs of debt when we feel there is nothing that we can do about  it. Open your mail and answer your phone when the bank comes calling. Ignoring the mountain of debt is only going to make it worse, taking responsibility and facing up to your financial situation is the first step.
2. Grab a pencil, paper and calculator. Now make a list of all your living expenses, and figure out how much money it costs you each month to live. Living expenses are your obligations, like housing, utilities, transportation, food, etc. Living expenses are not entertainment costs or bar bills.
3. Once you know how much is going out, figure out what is left at the end of the month by taking your monthly income and subtracting your living expenses. The money remaining is what you have left to negotiate with the credit card companies. You are now in a position to call the credit card company.
4. Call each one of the credit card companies which you owe money and explain your current financial situation and how it seems overwhelming and intimidating. Also explain that you want to remedy the situation, but as things currently stand it is not possible. Since you have taken the initiative to make the first step to call, this will be seen in a positive light and as a sign that you are willing to work with them.
5. Ask the company to reduce your interest rate, reduce or eliminate any fees you may have incurred such as late fee’s, over limit fees. Also indicate that you would like the company to close any open accounts that you currently have with them, so that you can concentrate on paying down the debt, not worry about incurring more next month.
6. Workout a payment plan with the credit card companies. This is something that they are accustomed to doing, and in many cases will accommodate your request. At the end of the day, these companies know that many people are considering bankruptcy in the current economic climate. Explain to them that you are willing to work out any sort of reasonable plan which will allow you to avoid bankruptcy, which is better for the both of you.
7. In some circumstances, you may want to make a settlement offer for the remainder of the debt. If you expect or have access to a lump sum of cash, sometimes it is possible to forgive the credit debt with a one-time lump sum payment. In these circumstances, make an offer in between 25 – 50% of the balance due, so long as this is something that you can afford. In many cases, the company will accept these terms.
8. One the plan has been finalized, get a copy of the plan in writing. In addition, make sure that you get the name and contact information of the person you negotiated with at the company. Credit card companies are large organizations, and in many cases the left hand does not know what the right hand is doing. To avoid confusion, get the details so that you have the facts straight.
9. Live by your word. The hardest part of this plan is going to be to stick to your payment plan, and avoid the pitfalls that got you in the situation in the first place. Live within your means, and avoid expensive distractions. Make all your payments on time, and use any extra income for reducing your debt.

Negotiating with credit card companies is not as difficult as it sounds. The biggest part will be making the decision to face the debt, and pick up the phone. Once this is out of your way, things will only get easier. Good luck and I hope it help.

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