More Credit Card Companies Willing To Play Ball And Negotiate Deals

[Jun 17, 2009.]

 

Credit Card Debts Settled For Much Lower Balances
In a recent New York Times article, one consumer shared his successful story of settling his existing account balance for half of what he owed. Interestingly, it was the creditor who made the first move, and called to request a payment on the already delinquent account. When the consumer proposed settling the account for half of his $5,486 balance, the representative immediately approved the deal without needing any additional supervisor's permissions.

Although only a few creditors confirmed the practice with NYT, it seems the rising delinquencies and toughening economy has left card issuers with fewer options. Bank of America and American Express were two creditors that mentioned such practices occur on a case-by-case basis and evaluation. While many other creditors refused to discuss their policy, the American Bankers Association also mentioned that these types of settlements are becoming more common just recently.

Creditors Must Negotiate Amongst Rising Delinquencies
Just last week, we wrote a short article detailing the 11% rise in credit card debt delinquencies during the first quarter of 2009. And with creditors having to deal with these delinquent accounts, the recent credit card reform legislation delivered yet another tough blow to the struggling industry. Card issuers now face tighter regulations and will have tougher times raising interest rates on existing balances and charging their fees. In short, many of the regulations have reduced the profitably of existing borrowers and their balances. As a result, it's almost no surprise to see some creditors accept the initial loss and settle these risky accounts.

Eliminate Your Credit Card Debts With A Debt Consolidation Loan
In credit card debt consolidation programs, borrowers payoff various credit card accounts and consolidate these loans into a single loan. And although consolidating high interest accounts into one account typically saves borrowers money on interest charges, individuals can take this opportunity to seek even greater savings. As often seen in debt settlement programs, a lump sum balance offering can be quite the bargaining chip in negotiations with creditors. Remember though, a traditional debt consolidation loan won't eliminate debts, but it will pay off existing creditors. And since more creditors are now accepting discounted settlements, this may present the perfect opportunity to negotiate a discount with creditors included in the consolidation loan.

As mentioned before, these negotiations are typically made on a case-by-case evaluation--but it's definitely worth a try. For more information on credit card debt relief, a debt consolidation loan specialist can provide you with more specific details.

 

About Author:

Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.