- 1). Contact your credit card company and negotiate the terms on your credit account. If the interest rate on your credit card is too high (such as 29.99 percent), then ask your credit company representative if she can lower the interest rate. You can make your argument by telling your creditor that you have been making consistent and timely payments, you have been a member for so many years, and now you're having trouble eliminating your credit debt because the interest rate is too high. The creditor may or may not accept your request, but it is recommended that you at least ask them once. It all depends on the company's policy and your individual situation; you may get a good deal by trying to negotiate your rate.
- 2). Once the terms have been negotiated, try to pay more than the minimum required amount. This way you'll be able to pay off your debt faster, and in return your credit score will improve.
- 3). Contact any lower-interest credit card companies with which you have sufficient unused credit and inquire about balance transfer offers. Many lenders offer promotions allowing you to transfer balances from other high-interest credit cards for a low- or no-interest term for a specified amount of time.
For example, if you owe $5,000 on credit card A and you are being charged an APR of 14.99 percent, and you request a balance transfer offer from credit card B with zero percent APR for 12 months, this will save you approximately $749.50 in interest for that year.
Most credit card companies charge a 3 percent (but no more than $75) balance transfer fee. This fee should be taken into consideration when conducting your cost savings calculation. - 4). Negotiate a lump-sum payment with your credit card company if you have have access to sufficient funds. The company might allow you to pay less than the total amount owed.
- 5). Consult with a debt management agency affiliated with the National Foundation of Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies if you owe debt to multiple credit card companies. The debt management agency will negotiate the terms with the creditors on your behalf to lower interest and fees or arrange for a workout plan.
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