How to Negotiate Credit Card Debt: Options and Steps to Take

For many people, credit card balances feel harder to manage than ever before due to inflation increasing faster than their paychecks can keep up with. The good news is, in many cases, you’re not stuck with the terms you have now. Credit card companies can, and sometimes will, adjust your interest rate, waive fees, or offer hardship arrangements if you ask. You won’t always get a yes, but it's definitely worth the effort to try. 

This guide walks you through what terms can possibly be up for negotiation, how to prepare yourself before calling, what to say when you’re on the phone with them and how to decide if the terms they offer you will make your situation better or just extend your problems further into the future. If you’re not sure if you want to go it alone, there is certified, non-profit help available to guide you through the process and make sure you understand exactly what any changes will look like for you and your debt long-term. 

Key Takeaways

• You can contact your credit card company directly to ask if they can offer you lower interest rates or add you to a hardship plan.
• Being prepared is important. If you don’t know what you can afford and what your goals for the call are, the conversation will not be as productive as you’d like
• Not every creditor will negotiate with you and not every offer is one you want to accept. Read everything carefully and if you don’t feel comfortable, get advice from a non-profit credit counselor. 
• If you’re managing several accounts, behind on more than one, or just don’t feel sure what to prioritize or what to do overall, a debt management plan through a nonprofit credit counseling organization could get you better results than trying to go it alone. 

Can You Negotiate Credit Card Debt?

Yes, you can often negotiate your credit card debt terms. Most lenders have some form of assistance available for consumers who are struggling and some will discuss options with you if you ask directly. 

That being said, creditors aren’t obligated to agree to any specific request, so you need to be prepared to have your request declined and be aware of your next steps. Creditors who do offer these concessions decide if you’re eligible for help based on things like the status of your account and your individual circumstances. A credit card that’s in good standing will likely be eligible for different programs than ones that are already 90 days, or more, past due. 

One key to trying this is that the earlier you reach out, the more willing your creditors may be to work with you. They tend to be more flexible with clients who come to them proactively versus waiting until their accounts are severely past due. 

What Can You Negotiate With a Credit Card Company?

Negotiating with a creditor means different things depending on what you’re dealing with and what you're trying to achieve. Common requests from consumers can include:

• A lower interest rate: Reducing your interest rate can lower your monthly payment and help you pay your debt off faster because you’re paying more towards the principal of your debt and less towards those high monthly interest charges
• Waived fees: Late fees or over the limit fees can sometimes be waived, especially as a one-time concession
• A new repayment plan: Some credit card or loan companies will be willing to adjust your due date, minimum payment or repayment term length 
• Settle your debt: In certain more severe cases, a creditor may agree to accept less than you originally owed them. This is usually an option once your account has fallen significantly behind. If a company ever suggests settling a credit card balance that’s still current, you should be hesitant. This will usually lead to a severe drop in your credit score. 

How to Negotiate Credit Card Debt Yourself

If you want to try to negotiate with your credit card companies on your own, you need to be prepared and know what it is you want to achieve. Here’s how you create a plan to increase your chances:

1. Review Your Debt and Your Budget

Before you actually reach out to your creditors, you need to figure out exactly what you can afford and what you’re asking for. You should aim to ask for a change that would be helpful but is also realistic. You also need to be honest about what you can pay. If they offer you a reduced payment but you know you still can’t afford that, you need to tell them that. You don’t want to accept concessions you know you still can’t work with. Be honest, reasonable and direct. 

2. Decide What You Want to Negotiate

Have specific goals for your conversation. Are you trying to get a reduced APR, get a fee waived, or join a hardship plan? Ask what will make your debt more manageable. Being clear will help the representative you speak with provide you with the best options. 

3. Contact Your Credit Card Company

Call the number on the back of your card or your statement. Ask the representative if the company offers hardship programs or repayment assistance for people struggling to keep their payments on track. If the first person you speak with doesn’t seem sure, ask them to speak to the hardship or retention department. Above all, be polite and respectful to everyone you speak with. Getting frustrated when you don’t immediately get what you want will all but close the door to any assistance you might ultimately receive. Credit card company reps are people too, so remember to treat them how you’d want to be treated. 

4. Explain Your Financial Situation Clearly

Be brief but clear about why your payments are no longer feasible for you to make. If you’ve had a job loss, medical issue, divorce or interest rate increase, you should tell them that because it makes your struggle more understandable. Then explain what you can afford. You’ll come out of your call with the outcome you were hoping for more often if you’re direct than if you give vague answers that don’t explain well what you need and why. 

5. Ask About All Options Available to You

You don’t necessarily have to take the first offer your creditor makes. Ask plenty of questions about what this deal would look like long term, if it would affect your credit or the total interest you pay back. If you’re concerned it’s not a good plan for you or worried you still won’t be able to afford it, hold off until you can think things through.Our certified credit counselors talk to consumers every day about what options they have to pay their debt off in a way they can better afford. If you need to weigh your options, reach out and we’ll let you know how the offer your credit card company gave you compares with what concessions we usually see for consumers with your level of debt with your specific creditors. Our counselors are never paid on commission so they will always be honest and with over 30 years in debt management, we have the experience to give you specific, personalized advice for specific situations.

6. Don’t Agree to Payments You Can’t Afford!

Just because your creditor offers you something, doesn’t mean it's the best option for you. If you can’t afford the solution they provide, let them know while you appreciate it, it’s still not affordable to you and ask if there are other options. If not, get a free online debt management quote to see what your monthly payments and interest would look like with experts negotiating on your behalf. 

7. Get Any Agreement in Writing 

If you decide to take your credit card company up on a hardship or updated repayment option they offer you, ask for the terms in writing for your records and review everything closely. Even with the best intentions, verbal offers can be misapplied, and having the new terms you’re supposed to have documented will help you avoid any potential issues getting things fixed. 

8. Follow the Agreement and Keep Records

If you’re able to get a new plan in place, make sure you keep your end of the deal and make all your payments, in the agreed upon amount on or before your due date. Missing payments can lead to you losing the improved terms you’ve managed to get, and you’ll find yourself back where you started without options to negotiate again.

What to Say When Negotiating Credit Card Debt

There’s no magic wording to use that will guarantee your creditor will say yes, but having a rough script ready for yourself, especially if you get nervous asking for things, makes the conversation easier. Here’s a basic starting point (but you should adjust it to feel right for you):

“I’m having a difficult time keeping up with my current payments because [insert brief explanation]. I want to keep making my payments, but the current payment I owe isn’t something I can realistically pay. I can afford about $[insert what you can afford] each month. Do you have a hardship program or other repayment options that could help?”

If you have a specific concession you’re hoping for, adjust your script for that:

If You Want a Lower Interest Rate

Ask “Is there any way to reduce my APR given my payment history?” This usually works best for consumers who are long-standing customers and have traditionally paid on time.

If You Can’t Afford Your Minimum Payment

Ask the rep you speak to about hardship programs, or other repayment assistance programs. 

If You’re Considering Debt Settlement

If your account is severely past due and you know you can’t afford to pay the entire thing back, ask if they have any options for settling the debt for a lower balance paid back through monthly payments. This should be done when you’re already delinquent and your main concern is getting the debt paid off, even if your credit is negatively impacted. 

Tips for Negotiating With Credit Card Companies

Here are a few things that should help your conversation go more smoothly:

• Stay calm and polite, even if the first answer you get isn’t what you’re hoping for. Representatives often have flexibility and are more likely to work with customers who are easy to work with. Becoming rude or belligerent is all but guaranteed to shut down the conversation for good. 
• Write down the name of everyone you talk to and the date of any call you have in case you need to reference it later. 
• If you don’t get anywhere talking to the first person, there’s nothing wrong with calling another time to try again or asking to speak to their hardship department.
• Don’t overpromise what you can pay each month! Only agree if you’re confident you can afford to make the new payment every month, on time. 

When Should You Negotiate Credit Card Debt?

You don’t need to wait until you’re already missing payments to reach out to your creditors. If you can tell it's going to become too difficult to keep up with your payments, contact your credit card company to find out what assistance is available. Asking earlier versus later often opens up more options because you’re still a client in good standing. 

What Are the Risks of Negotiating Credit Card Debt?

The risks of changing your credit card terms depend on what you’re negotiating. Before you agree to anything, you should be aware of what any possible downsides could be. Some can be:

• Your credit card being closed (though this may be best if you want to focus on staying out of debt)
• Changes to how the account is reported
• You will usually still have interest to pay each month, even if it’s been reduced
• A longer repayment period if your monthly payments are reduced but your interest isn’t
• Tax implications for portions of your debt that are settled
• Collection or legal activity if you still aren't able to repay your debt
• Debt relief and settlement scams targeting people who are trying to negotiate new terms for their debt

The types of consequences you could face are very different depending on what concessions you obtain. Asking for a lower interest rate or hardship assistance is very different than settling your debt for less than you owe, so not every drawback will affect every person who negotiates with their credit card company. 

When Negotiating Credit Card Debt Yourself May Not Be Enough

Negotiating on your own can work, especially if you have one account or a good reason you can’t pay your debt back at its current terms. But many people find they have better results with professional help. This might be the case for you if:

• You have several credit cards or creditors to manage
• You’re behind on more than one account
• Your minimum payments are no longer affordable
• Creditors aren’t offering hardship options you can reasonably afford
• You aren’t sure which debts you should be prioritizing paying down first
• You’re considering settlement but aren’t sure how the consequences would affect you
• Trying to negotiate is already becoming overwhelming
• You’re too anxious to try negotiating on your own

If any of these things sound like they could apply to you, a certified credit counselor at Family Credit Management can help you by taking care of negotiating with your creditors and building a repayment plan that’s customized to you. 

Alternatives to Negotiating Credit Card Debt Yourself

Negotiating directly with creditors is not your only option. The right alternatives depend on how much debt you have, what you can afford to pay and what hardships might be preventing you from paying.

Credit Counseling

A nonprofit credit counselor can give you a full picture of your options for free. A counselor can help you understand where you stand before you decide what you want to do next. 

Debt Management Plan

A debt management plan consolidates multiple debts into one monthly payment, typically with reduced interest rates negotiated by the credit counseling agency on your behalf. This makes repayment easier and often secured better terms than you might be able to get yourself. 

Debt Consolidation

Consolidating debt, whether through a loan or another mechanism, combines multiple balances into a single payment. This can simplify your finances, though it's worth comparing the new terms carefully against what you're currently paying. However,this option can be dangerous if you’re not completely disciplined. Paying off your debt with a new loan frees up your existing credit lines meaning you can charge those accounts back on top of the new debt you’ve just taken out and you’ll find yourself in twice the trouble. This option really only makes sense if you’re able to follow through on not using those credit cards again. 

Debt Settlement

Settlement means negotiating to pay less than the full balance owed, usually in a lump sum. It can reduce what you owe, but it typically comes with credit damage, potential tax consequences, and no guarantee that a creditor will agree. Weigh the pros and cons of debt settlement carefully before pursuing this route. If you do feel debt settlement is the best option for you, investigate non-profit debt settlement. Most debt settlement companies you see advertised are for-profit who use their disproportionately high fees to fund their massive advertising campaigns. Many consumers use these companies not understanding what debt settlement will do to their credit and unaware that their accounts won’t be getting paid for months while the accounts become severely delinquent. Non-profit companies offer multiple options like debt management, debt settlement and hybrid options and their counselors aren’t paid on commission the way for-profit reps often are, meaning a certified non-profit counselor will only recommend what makes sense for you and your specific situation. 

Bankruptcy

For some people, even with reduced interest rates and payment, paying back their debt under their circumstances just isn’t possible. Bankruptcy should be reserved for when no other option is feasible because it has a substantial negative impact on your credit, but if you can’t afford anything else, there’s no shame in admitting it's the best option for you. Just like with debt management or settlement providers, do your homework to make sure you find a bankruptcy attorney with strong reviews and transparent fees. 

Bottom Line: You Can Negotiate Credit Card Debt, but You Don't Have to Do It Alone

Contacting your credit card companies personally can be a great first step when making payments becomes difficult, especially if you don’t wait until you’re already behind. 

But if you’d rather have an expert handle the back and forth with your creditors, or you’re managing debt across several accounts, a certified credit counselor at Family Credit Management can help you negotiate and build a repayment plan that makes sense for you and handles your entire debt picture, not just one account at a time. 

Negotiating Credit Card Debt FAQs

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