Credit card debt can be oppressive and can interfere not only with your credit score, but also your ability to pay your bills. If your debt has become so high that you can't pay off the balance or make monthly payments, you can try to negotiate with your credit card company or the debt collection firm that owns the debt. If you agree to pay a bulk amount upfront, this is called a debt settlement and might affect your credit. But if you renegotiate the terms of your credit card agreement, you'll simply have to abide by the new terms.
Credit Card Negotiation
Before you draft a letter or contact your credit card company, decide what you can actually afford to pay. Even if you negotiate lower monthly payments, you won't benefit much if you can't regularly make these payments. If it's a settlement you're after, you'll generally need to pay all of the money upfront, so make sure you have the money ready to go before you contact your card company.
Address your letter to the right person and company. If you've spoken to a representative on the phone, address the letter directly to her. If your account is in collections, send the letter to the debt collection company, not the original card company. Print the address and name of the recipient and follow it up with an "Re:" line that mentions your account or card number. Put a date on the letter for documentation purposes and begin with a greeting followed by a colon (such as "Dear Mr. Jones:").
In the body of the letter, propose a specific solution, rather than asking the card company to give you a settlement. You might suggest a lower interest rate, a reduction in monthly fees or a renegotiated minimum monthly payment. If you've experienced extraordinary circumstances that make payment difficult -- such as the death of your spouse or a serious illness -- mention this. Keep the letter short. Pages and pages of information are not helpful. Avoid blaming the card company or making allegations, even if you feel you've been treated unfairly.
Sign the letter with your full name, and ensure you provide your preferred method of contact. Send the letter via both certified and first class mail. Certified mail with a return receipt requested will provide a record indicating that you sent the letter, and will give you a date when it was received.
If your debt is past the statute of limitations, offering to pay it could reset the statute. State statutes of limitations vary, but are generally between three and 10 years. Similarly, if you don't think you owe the full debt or have made a payment that wasn't counted, don't admit that you owe the full debt. Debt collection companies are required to validate debts at your request, so request validation instead.
Van Thompson is an attorney and writer. A former martial arts instructor, he holds bachelor's degrees in music and computer science from Westchester University, and a juris doctor from Georgia State University. He is the recipient of numerous writing awards, including a 2009 CALI Legal Writing Award.