If you want to utilize your credit card properly so you will not be burdened with debt, you may want to understand how to negotiate with creditors. You have every right to air out any grievances or requests to your credit card company if you feel that it will keep you from incurring debt. Believe it or not, they value you as a client and they want more than anything to get you to stay with them. They would like you to use their products for as long as you can afford it financially. As their client, you can always seek out better terms to help you maximize the benefits of the product that you are using. You may be surprised at how cooperative your creditor can be just to strengthen your relationship with them.
4 issues you can discuss with creditors
Of course, there are only a couple of issues that you can negotiate with creditors. Here are the 4 main reasons for you to want to talk to your credit card company about your account.
Changing your payment date.
One of the things you can negotiate with creditors is your payment date. Sometimes, you can afford your payments but you just need to organize the schedule to keep yourself from forgetting your due dates. It helps to have most of them right after your paycheck date so you are sure that you have the funds available before the payment deadline.
Lowering your interest rate.
Credit cards are notorious for their high interest rates. This is one of the common reasons for people to talk to their creditors and negotiate. Although creditors have every right to raise their rates without reason, you also have the right to request for a lower one. Just call them and compare their rates with another credit card company. The best time to negotiate with creditors about this is when you have just received a low interest rate credit card offer from another company. That way, you can bluff by telling them that you are tempted to switch to the other company if they fail to give you better rates.
Requesting for a debt reduction.
Another reason to negotiate with creditors is to ask for a debt reduction. This usually happens when you are having trouble keeping up with your payments because of a recent financial difficulty. This can have some consequences because you will be unable to pay the whole amount of your debt. The idea is to pay only part of what you owe and convince the creditor to forgive the rest. That will prompt the creditor to put in a negative report on your credit report which, in turn, can affect your credit score. You might want to read about the pros and cons of debt reduction before you start negotiating.
Suspending payments for a certain period.
The last type of issue that you may want to discuss with your creditor known as a forbearance agreement. This is when you will ask the creditor to allow you to stop making payments while you get your finances in order. Some creditors actually agree to it and that agreement will keep them from reporting your lack to payments to the credit bureaus. Of course, most of them will not agree to cancel the interest so while you are not paying your monthly dues, the balance will continue to accrue interest.
Tips when negotiating with credit card companies
When you are negotiating with credit card companies, you may want to consider the following tips to be more successful.
Know when to negotiate. Most of the time, a perfect timing will get you the agreement that you are aiming for. If you had been good with your payments for the past couple of months, that may be a good leverage to negotiate with creditors about your high interest rates. Of course, being in a financial difficulty is something that should prompt you to negotiate too.
Know who to talk to. It is also important that you talk to the right person within the credit card company. That will get you faster results if you negotiate with the one who is authorized to grant approval. For instance, a change in your due date can be discussed with anyone from customer support while a lower interest rate or debt reduction requires a managerial approval.
Know your rights. It is important that you know your rights as a consumer before you really decide to negotiate with creditors. This is especially true if you are negotiating for a debt reduction. Also, make sure that you put everything in writing. That way, you will have proof of any agreement between the two of you.
- Know when to get help. Lastly, you have to know when to get help. There are negotiations that work out better with a professional. For instance, you could have better luck if your debt reduction is negotiated by a debt settlement company or a lawyer. When you are getting professional help, you must be careful with the company who you will be hiring to assist you. For one, they have to be members of reputable organizations like the National Foundation for Credit Counseling (NFCC) or the American Fair Credit Council (AFCC).