Negotiating Options on Credit Cards (MAQT)

First, what can you negotiate on credit cards?
Due date
Interest rate
Credit limit
Settling the account for less than the full balance.

So if your goal is to pay off your cc’s in full, then my guess is you want to settle for a lesser balance.

Well, you can’t ‘settle’ an open/current account. A settlement is only an option if your account is either ‘closed’ or ‘charged off’

You could ask about getting the interest rate reduced if youre working toward pay off and they are still open/active accounts. Keep in mind they may do a hard inquiry into your credit reports for approval of a lower interest rate.

If your accounts are just a couple of months ‘past due’ but still active accounts, then you might be able to ask about hardship programs that reduce interest for a set period of time that help you get caught up.

So if your accounts are closed or charged off, all you have to do to negotiate a settlement is to call them. If it just recently closed/charged off they might only take 20-30% off the balance.

But if it has been charged off for a few years or is close to the statute of limitations, they might settle for as much as 70-80% off. If you go this route, always ask if they will do a ‘pay for delete’ meaning remove it from your credit report if paid. And always get it in writing before making the payment.

(Anytime you agree to a settlement on any one account that you save over $600 off the balance, you will get a 1099 form for that year, and have to claim the unpaid portion of the balance as ‘earned income’ for the year. Saving $599 or less in a settlement is NOT a taxable event)

To wrap up, if your accounts are all current, not maxed out, then just focus and get them paid off as quickly as possible.

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