Credit cards offer consumers a way to purchase items without breaking the bank, but large balances combined with high interest rates can sometimes overwhelm credit card holders and threaten to do just that. The U.S. Census Bureau reports there are an estimated 180 million credit card holders in America in 2011. A percentage of that number will fall behind on payments or worse -- fall into collections. Before this happens, consumers should contact their credit card provider and propose an alternative, including a settlement, a lower interest rate or a smaller minimum balance.
Gather your credit card statements and compare the minimum amount due (or full balance) to your monthly or yearly budget. Determine how much you can reasonably afford to pay each month until you can bring the account current. If you are unemployed or have another reason not to expect to be able to pay in the long term, decide how much of the total amount due you can pay in full. Make notes of this information.
Open a professional letter template using a word processing application such as Microsoft Word. Type the mailing address for the credit card company (use the address listed on your statement for general inquiries), date the letter and type your mailing address. Include your credit card account number in a reference line. Address it to “Account Manager.” Begin your letter by again referencing your credit card number and stating how long you have owned the account. Include a brief (but detailed) description of the reason you are making a proposal. For example, state that you lost you job and fell behind on payments if that is the reason for your troubles.
Write a paragraph that clearly states what you are proposing. For example, if you wish to propose a settlement, write the amount you wish to pay and request that this amount be accepted for the account to be considered paid in full. State an amount lower than you can afford. Expect to receive a counter offer that is higher, which you can then counter with a lower offer until you reach your target. In your closing paragraph, include a statement that you wish to accept responsibility for your debt, but due to circumstances beyond your control, you are requesting assistance from your credit card provider. Ask to be contacted in writing if the company has an alternative solution, such as a credit-counseling program.
Save your document. Make a copy of your proposal for your records and send another through certified mail. Expect to amend or adjust your proposal letter if the company counters it. It can take numerous letters of negotiation until your account is either brought current or settled as paid in full.
Angela Campbell began writing professionally in 1997 for Easley Publications in Easley, SC, and later for Gannett newspaper properties. A graduate of the University of South Carolina's mass communications and journalism program, she has won numerous South Carolina State Press Association awards for spot news reporting, business reporting, feature writing, photography and page design.