Credit Card Debt Negotiation: Basics and Options

One of the most common financial issues for Americans today, and one that many of our clients deal with, is outstanding credit card debt. The median credit card debt among US citizens sits above $3,000, and many people use a sizable portion of their income each month to pay down credit debt.

At 1st Choice Money Center, we’re here to help Utah clients with a variety of loan types if they’re struggling with certain forms of debt, including installment loans, title loans and several other fantastic alternative to predatory payday loans (which we do not offer). We’re also happy to provide basic insight and expertise on how to improve your financial situation, including among those who have significant outstanding credit card debt. One possible method here, in addition to our quality services: Negotiating your debt with your credit card company, attempting to find a workable solution for both parties. This two-part blog series will go over some basics on how to go about this process if you feel it’s a viable option for you.

credit card debt negotiation options

Research Negotiation Options

First and foremost, take the time to understand the different options you have for negotiating with credit card companies. Here are a few of the most popular options:

  • Asking For a Reduction in Interest Rates: Many people who face significant outstanding credit card debt often simply need a way to reduce their interest rates and monthly payments. Total savings from this process will vary, depending on the amount you owe and the original terms of your credit card.
  • Switching to a Different Card: For those with outstanding debt on a particular card, the solution may be as simple as finding a different card that is willing to accept you and negotiate an acceptable rate for repayment.
  • Applying for Debt Consolidation: This basically means negotiating terms on one or more credit cards at a time, in order to consolidate your debt into one lower interest rate.
  • Asking for an Extension: This is often the best option for those who are not able to meet their monthly credit card payments, especially if you can find a way to pay off your balance within 3-5 years.

There are also several possible agreement types that may be reached with your credit card company, which we’ll go over in our upcoming sections.

Lump-Sum Agreement

If you agree to a lump-sum arrangement with your card company, this will involve you making one final payment in order to pay off your entire outstanding balance. This agreement type is often only available if you have enough money in savings, checking or investments to pay off your credit card balance within a very short period of time. There are some companies that may be willing to accept this option for smaller balances, though it’s generally more favorable to make larger monthly payments towards your debt if possible.

In part two of our series, we’ll go over some of the other possible agreement types you may reach with your credit card company during negotiation. For more on this, or to learn about any of our title loans or other quality short-term loans, speak to the team at 1st Choice Money Center today.