All hail the great FICO! In order to get the finer things in life, a good credit rating is required. Looking for a house or car with a great interest rate? There’s a credit score for that. Need a personal loan? There’s a credit score for that too. Americans have billions of dollars in credit card debt, and the numbers continue to increase as people fight to “keep up with the Jones’”. In order to get the things that everyone else has, you have to work on cleaning up what you already have and focus on not getting yourself back in debt again.
If you are struggling with credit card issues, here are a few ways to negotiate those current debts and start getting them cleaned up. The tips in this article don’t require any extra fees. All you need is a little patience and a lot of elbow grease to get the job done.
Ask to Settle
When considering contacting a creditor to settle a debt, here are a few things to look at before you pick up the phone or send that email.
- Is it a Zombie Debt? Zombies aren’t just on The Walking Dead. There is such a thing as a Zombie Debt. This is a debt that has surpassed the statute of limitation according to the state in which you live. Be sure to find out the statute of limitation for your state. Old credit card issues may be the least of your worries. This debt may be too old to pay.
- If you have a debt that is within the statute of limitation and you wish to contact the creditor, never allow them access to your account. Some creditors will clean out your bank account even if you settled on a different amount. Try using a prepaid debit card to send the payment. This brings me to my next point.
- Always get your settlement negotiations in writing. Sometimes you may get an option to settle in the mail. If you decide to settle, be sure to keep it for your records. If you decide to come to the creditor with your settlement, be sure to get something in writing before you send them a payment.
Set Up a Payment Arrangement
When it comes to credit card issues, anything can rise up that will put you in a tough situation. It’s always a good idea to get in contact with the credit card company to set up a payment arrangement when you feel like you are going to fall behind. Payment arrangements can vary based on the company. Some will request you pay the full amount at a later date, others work on your terms, and some break down the debt into monthly payments. Keep in mind:
- Don’t let the debt fall too far behind. Don’t be afraid to keep in touch with the credit card company if you are having issues. Often times it’s our fear that keeps us in debt. When a problem arises and you know you are going to be late, make the phone call. If it’s too late, sometimes, it is out of their hands at that point.
I remember when I had fallen behind on my car note and they were going to repossess the car. My account rep said, “Why didn’t you tell me this sooner? We could have put you on a payment plan. So many people wait until it’s too late and then the situation is out of my hands.” I ended up losing my car and now I have repossession on my credit because of my fear.
- Always remain truthful about your credit card issues. Believe it or not, some people feel sympathy and will pull strings if they can just to help you out.
- Never bite off more than you can chew. If you know an arrangement is too much, don’t accept it.
Request a Forbearance
Ok, what does that mean? A forbearance is a postponement of making payments on a debt. These are usually granted to people that fall on hard times and find themselves in a situation where they can’t pay their debt. Depending on your situation or other credit card issues, forbearances can last six months or more. In some cases, they can even lower your interest rate or payments.
Change Your Payment Date
If you are having credit card issues due to payment dates, request to have the date changed. Don’t fall into debt because you get paid on the 19th and your bill is due on the 1st. There are several companies that will work with you on changing your payment date so your bill will be paid on time.
No matter what credit card issues are in the world today, there is always someone there that will work with you. Always know the laws and know your rights for your state.