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Negotiating with companies can help your credit card debt

You are drowning in credit card debt, and you just don't know what to do. Instead of falling into a cycle of worry and despair, consider contacting your credit card company to learn about their debt relief programs. Most people do not realize that credit card companies are often willing to negotiate payment due dates, interest rates, late charges and even credit limits, depending on the nature of your relationship. A lump sum settlement can also help for those who are facing serious financial issues that border on bankruptcy.

For example, clients who obtained a credit card when they had mediocre credit may be able to obtain lowered interest rate payments, especially if their credit has improved and they have a low balance. It also helps if you have made on-time payments for a period of years. Those with improved credit may also be eligible for programs to eliminate annual fees or even up their credit limits.

Those who are struggling financially may be advised by a financial professional or attorney to seek out a lump sum settlement. This is useful for those who are verging on bankruptcy but are not sure they are ready to take the plunge. Lump sum settlements allow you to settle debt for pennies on the dollar, and the creditor may still come out ahead, compared to a full debt discharge.

Before you negotiate, determine where you stand as a borrower. "Good" customers generally make payments on time and help make the company money. Those who need financial help likely are having difficulty making even minimum payments. These different positions may help you negotiate for your different goals; a lump sum settlement is more easily achieved when it is obvious that you cannot pay, for instance. Credit card companies offer a variety of options for those who are not entirely sure that they want to pursue bankruptcy right away.

Source: MarketWatch, "How to negotiate with your credit card company" Abby Hayes, Apr. 15, 2014

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