Can you negotiate a lower payoff amount on a credit card?

Unless you are seriously behind in payments on your credit card accounts, it is doubtful your card issuers will agree to settle an account for less than the full balance owed. If you are able to negotiate an amount you can afford, be sure to get the settlement offer in writing before you send in the payment.

How do you negotiate a payoff with creditors?

The general strategy of negotiating with your creditors is fairly straightforward: Pay what you can reasonably afford on the outstanding debt that you owe. This, of course, must be balanced with how much a creditor is willing to accept. Generally, creditors will want to obtain a lump sum payment over regular payments.

How much do credit card companies settle?

Credit card companies may settle for a negotiated amount equal to roughly 40-60 percent of the balance owed, according to the BBB. Credit card companies tend not to publicize settlements, so there are no hard statistics on success rates or settlement amounts.

When to negotiate a payoff with a creditor?

Creditors typically are more willing to negotiate when they know they will be paid right away. Tell the bank you’re considering filing for bankruptcy — even if you’re not. This often encourages a creditor to accept a lower offer in the hope that they’ll get paid something.

Can a credit card company accept a smaller payoff?

Even when card issuers agree to accept less than the full amount you owe as a payoff, most will still report the number of days the account was delinquent. Although it will put a black mark on your credit report for several years, negotiating a smaller lump sum payoff may be less damaging to your credit standing in the long run.

How much do you have to pay off credit card debt?

Most creditors will not consider this amount unless your debt is very old. Still this gives you a starting point for negotiations. Some creditors will accept a payoff of about one-third of the original debt, although many creditors will want at least 60 percent of the balance you owe.

What happens when a creditor lowers your settlement offer?

Lead with bankruptcy. Regardless of the actual likelihood of a bankruptcy filing in the near future, hinting to the creditor that bankruptcy is a likely future event may cause the creditor to lower its settlement offer.