With consumers facing tough times in the wake of the financial crisis of 2008, it’s a good opportunity to discuss the possibility of getting your credit card debt sorted. Most people assume credit card companies care only about the profits they make. Interestingly, this is not the case. More and more people are taking the opportunity to negotiate with their card issuers, in order to reduce monthly repayments, or the interest rate applicable to outstanding balances. Let’s take a look at a few ways in which you can cut costs by talking with your bank.
First – own up to your debt
Stop ignoring it, and start acknowledging that you got in a bit over your head. If you can’t bring yourself to uncover your financial situation, you have very little hope of successfully convincing others (the financial institutions) to help you. Ring your credit card company, ask them to explain and quantify the outstanding balance on your card, and record this for later use. Open all the envelopes you stashed away because you were too frightened to view your “ending balances”. Get these documents sorted and in order, and then congratulate yourself on completing the first step.
Second – do a mini-budget for yourself
Work out the total amount you have owing on all your credit cards, the aggregate minimum monthly payments that you are obliged to make, and the total amount of cash you have coming in each month. This will put you one step ahead of the credit card companies and will give you a slight edge over the following negotiations. When you have calculated these key amounts – it’s time to get the phone ready.
Third – dial the number of each credit card issuer
When you get an answer – don’t be afraid to ask for either a male or female representative, depending on which you feel more comfortable with. Admit it – we all have a preference, so don’t hold back. Now comes the most important part of the process – honesty. Take the time to explain exactly what your financial situation is, how much you have owning on this and other credit cards, and how much you think you can afford to pay each month. You will probably be surprised at how well the company reacts. Customer service representatives are not only trained in fixing account problems, but also in finding solutions to payment issues and plans.
With any luck, you and the company will have agreed on a beneficial solution by the end of the call. If not, wait a few days and give it another try! Different representatives will, of course, recommend different things. The reason they are so helpful? At the end of the day, if you go bankrupt – they will receive none of the money you have outstanding. Therefore, it is in the card issuers’ best interests to go out of their way – whether it be by cutting interest rates or slashing the required monthly payment, in order to keep you afloat.
As a final note
It is important not to abuse this kind of spirit shown by the banks. If you go on to break the arrangement by failing to pay or settle your account as agreed, you may find that the company develops little sympathy for you in the future. Whatever you do, take an honest and open approach to your financial matter, and with any luck, you will be back on track in no time.