Guide to Lowering Your Credit Card Payments
Written by Gloria Zhu   

After falling into credit card debt, it takes hard work, time and money to get back on track. However, what if we were able to alleviate the problem before it happens? What if we could lower the amount you had to pay? Negotiating with your credit card company can help. This is one of the first and easiest options you should look at. Here are the steps on how to do it.

Step 1: Ask For A Lower Interest Rate
If you've been making payments on time, you should have no trouble negotiating a rate that is at least 2 percent below the national average. Even if you haven't been making payments on time, it's worth a phone call to see whether you can cut your interest rate slightly. For more information, please see the article on Negotiating a Lower Interest Rate.

Step 2: Request That Fees Be Waived
Ask that fees for making late payments and accessing money through ATMs be waived. Some credit card companies won't budge on these fees. Others are surprisingly willing to negotiate.

Step 3: Set Up A Payment Plan
If you've been making your payments in a timely manner, most credit card companies won't negotiate much on payment plans. However, if you've been unable to pay for several months, you may find them willing to work with you to set up an affordable plan. After all, they'd rather get their money slowly than not get it at all.

Step 4: Lump-Sum Settlement
Ask about paying your settlements all at once. This may be able to decrease about 25 percent of the total balance.

Step 5: Write It Down
Have all your negotiated deals regarding your credit card debt in writing. This provides written proof and documentation in case issues come up.

Step 6: Seek Credit Counseling
They are professionals for a reason! An experienced and reputable credit counselor may have information you do not know and may be able to work out a deal or find solutions you can’t.

Tip: Make bi-weekly payments
If you're the sort of customer that carries a balance on your credit card (and these days, most customers do), card issuers typically charge you interest on a daily — that's right, daily — basis. The trick is this—lowering your balance sooner rather than later means paying lower interest. Submitting half payments every two weeks rather than a bigger payment once a month will do the trick.

If you negotiate a payment plan or a lump-sum settlement, be sure to live up to your end of the bargain. Failing to comply with your part of the deal may nullify it. Do not believe the old wives' tale that just seeking credit counseling will damage your credit rating. It won't, but missed and late payments will.
Last Updated on Tuesday, 21 December 2010 06:08