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Settling with your credit card company

Posted by Andrew Chan  December 15, 2008 10:30 AM

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I am planning to borrow some money from a family member for little or no interest. I would like to use it to pay off three of my credit cards totaling $15,000 dollars. What would be the best way to get these companies to lower the total amount owed so I can pay them off for less?

If you are having difficulty meeting your credit card obligations, one option may be to try to negotiate a settlement with the credit card companies directly. Credit card companies may be willing to provide you with various forms of relief including reducing your interest rate, reducing your monthly payments, waiving late payment fees, reducing the total amount that you owe, or extending your payment period.

If you decide to contact them to negotiate some form of relief, you should contact them as soon as you suspect that you will have difficulty making your payments. Let them know if you have experienced any financial hardships (such as a job loss or a medical emergency) that may have contributed to your inability to make timely or full payments. Also, discuss the things that you are trying to do to remedy the situation. These steps may give you a better chance of successfully negotiating a settlement with them.

Each credit card company may handle your situation differently. Some may be willing to work with you to avoid the collection process while others may refuse to negotiate with you at all. In either case, it is still to your benefit to at least ask the question.

Keep in mind that negotiating with your credit card company for a settlement is only one option available to you. Additional options such as debt consolidation, credit counseling, debt refinancing, and bankruptcy should be evaluated and understood. There are advantages and disadvantages to each of these options and you should evaluate each of them given your specific financial situation before deciding on a how to proceed.

You can learn more about debt management and credit counseling by visiting the websites of The National Foundation of Credit Counseling at and

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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Local finance professionals share insights and advice on issues such as budgeting, managing debt, and retirement planning.

About the contributors

D. Abraham Ringer is a CERTIFIED FINANCIAL PLANNER practitioner and a Financial Adviser with Morgan Stanley Global Wealth Management in Boston. He is registered in MA, NH, NY and several other states to which his articles are directed. For more information please visit
Financial Planning Association™ of Massachusetts has 900 members who specialize in the financial planning process. Many of its members engage in philanthropic pro bono work in their communities, recommend legislation, elevate public awareness, promote financial literacy, and advocate for sound economic and tax policies.
Odysseas Papadimitriou is the founder of, a credit card and gift card marketplace, and, a personal finance site. He has more than 13 years of experience in the personal finance industry, and previously served as senior director at Capital One.

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