More Americans than ever before are using credit cards to purchase things—this applies to everything from groceries to electronics. Consumers are lured deeper into credit card debt because they’re told that they can buy now and pay later, along with added incentives such as travel points and cash backs.
According to the latest statistics, credit card debt in the US has hit a record $1.04 trillion. With only 40% of Americans having enough funds to pay off their balances, these figures are quite alarming.
With this debt comes the financial burden of paying off what you owe to the credit card company. Many people are unable to successfully negotiate workable solutions for repayments when they find themselves unable to pay. This has a significant negative impact on their overall credit score.
Here’s a simple guide to help you negotiate better terms of payment for your credit card debt:
Step #1: Know What You Owe
The first step you need to take before paying off your credit card debt is to assess what you owe.
Having a clear picture of your complete credit card debt and the different interest rates involved is essential. Either log into your online account or check out your most recent credit card statements to get a clear idea of your total debt.
Once you have a good idea of what you owe, you can begin to assess your ability to repay.
Step #2: Know Your Settlement Options
Before you pick up the phone and get in touch with the credit card company, it’s important to understand the various payment options available to you.
Whichever settlement option you choose, it will directly affect your credit score and can have varying tax implications.
Common settlement options for repaying credit card debt are:
- Workout agreement
- Lump-sum settlement
- Hardship plan
- Debt management
- Debt settlement
Step #3: Call the Credit Card Company
The final step is to call the credit card company and get ready to haggle. Everything is negotiable. Keep that in mind until you reach a settlement that is ideal for your current financial situation.
Don’t be afraid to ask for what you want. Credit card companies are usually looking for any way to get their money back and can be persuaded to change the terms of your settlement.
Hire a professional Credit Repair Company