To Handle A Credit Card Payoff Negotiation
Credit card interest that spirals out of control.
In the days of low interest rates and a healthy economy, credit card companies were offering very attractive deals
to tempt customers to sign up and take their credit cards. Many customers did so, then the economy started to
nosedive and more and more people used their credit cards to buy essentials and as a way to borrow money. These
same people now find themselves only able to make the minimum payments and the interest on their debt just piles
up. At this rate, they will never pay off their debt, so the only hope is to see if the company will enter into a
credit card payoff negotiation.
Why should a credit card company consider a payoff negotiation?
Credit card companies want one thing, not to have to write off your debt, they want their money back. You have paid
a ridiculous sum of interest over a period of time, so they have made their profit on lending you this money. What
they want now is to get the actual money loaned back, and if you cannot pay now, then prosecuting you may result in
your bankruptcy, which means they may never get their money back. What they want to be sure of is your ability to
pay them back something each month, preferably more than the minimum. For the borrower to be able to do that, the
credit card debt has to be changed to an agreed sum owed, and a reduction in interest.
How to handle a credit card payoff negotiation
Firstly, draw up your budget; add up all your expenditure and your income. If you only have one credit card to pay
off then decide how much is the maximum that you can pay monthly, and the minimum, regardless of interest they are
charging. If you have several debts, then add them all up and decide how much of your income can you live on enough
to go towards these debts and still live. Divide the amount you can pay amongst the debtors; one approach is the
snowball approach where you pay off the debt with the highest interest first, then the others. However, in a
credit card payoff negotiation you are making an offer, and asking the company to either freeze or reduce
the interest. Always ask for the interest to be frozen first as this will allow the debt to be paid off more
Source: Credit Cards For People With Bad Credit Rating
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