How can I lower my credit card balance?

The best way to reduce credit card debt

1. Step 1: First call your creditors to negotiate lower interest rates.
2. Step 2: Prioritize your debts.
3. Step 3: Streamline your budget to maximize cash flow.
4. Step 4: Pay as much as possible on one debt, then minimums on the others.
5. Step 5: Knock your debts out, one by one.

How can I get a lower interest rate on my credit card?

Most cards have a variable interest rate, meaning it can fluctuate based on several factors, including your card issuer’s discretion. You can negotiate a lower interest rate on your credit card by calling your credit card issuer—particularly the issuer of the account you’ve had the longest—and requesting a reduction.

When to negotiate a lower credit card balance?

If your credit card debt is financially overwhelming, and the prospect of paying it all off seems impossible, negotiating with your credit card company for a lower balance is probably an attractive option. Should your credit card company agree, it will settle your outstanding debt for less than you owe.

What happens if you settle a credit card for less than the full balance?

Your credit card company will notify the credit bureaus that you settled your account for less than the full balance. This has a considerably negative effect on your credit scores because it indicates you lacked the necessary debt management skills to pay creditors in full. That negative mark will stay on your credit history for seven years.

What to do if you can’t pay off your credit card?

You’ll get a MISC 1099 form for the unpaid balance, which has to be counted as income on your taxes. If you can’t handle your growing credit card debt, ask your credit card provider for a lower interest rate. A lower interest rate means your debt accrues at a slow rate that should help you pay it off faster.