Are Credit Card Companies Willing to Negotiate?

Credit card consumers can negotiate credit card debt if their credit card companies are willing to work with them.

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Yes, credit card issuers can be reluctant, but with a few tips, you can negotiate a plan that’s a win for you and your creditor. 

Of course, negotiating credit card debt can adversely affect your credit score, and could even result in the closure of your credit card accounts. Thus, this isn’t an effective plan to get out of debt; however, if you’ve exhausted other options, you may want to give it a try.

This article will guide you on how to negotiate credit card debt, its effect on your credit score, and determine if it’s the ideal solution for your circumstances. Of course, credit repair companies in Houston, such as The Phenix Group, can help in the process when it may get too overwhelming.

Negotiating With Credit Card Providers

These four steps can help you negotiate with your credit card company:

  1. Call your credit card provider at the number on the back of your credit card

  2. Ask for the debt settlement or financial hardship department

  3. Explain your circumstances to the representative and determine what options you have

  4. If you reach an agreement, ensure everything is in writing before you send any money

There are various financial agreements you can discuss with your credit card company, including:

  • A lump sum agreement: You pay a specific amount less than your total debt if the credit card company forgives the difference. However, you must have the money ready because credit card providers don’t like waiting after they’ve agreed to a debt settlement. Unfortunately, the credit card company will close your account if you settle a debt for less than what you owe.

  • A workout or payoff agreement: You can renegotiate the terms of your payments, so it is easier to pay your debt off over time. As part of your financial plan, the credit card company may waive penalties, lower your interest rates, or reduce your monthly payment due. In exchange, you must comply with the specified payment schedule. With this type of agreement, the creditor could suspend your account, which means you can’t use it until you pay your debt. The creditor can also close your credit card account altogether.

  • A hardship agreement: If you’re going through a short-term economic hardship, your credit card company can temporarily lower or pause payments. Often, you must agree to a structured repayment plan. The credit card company may suspend your account until you've completed the hardship plan. 

Wondering what exactly you can dispute on your credit card? Check out our recent article.

Does Negotiating With Credit Card Companies Hurt Your Credit Score?

Negotiating with creditors can hurt your credit score, so it’s crucial to consider other options first. If you haven’t made payments, your credit score may likely have taken a hit, and creditors rarely negotiate debt until you’re late on paying your bills.

Furthermore, credit card issuers usually report the debt as settled, instead of being paid in full when you settle a credit card debt. This negatively affects your credit history as it shows you didn’t repay your debt in full. If the creditor cancels your card, it’ll lower your available credit, ultimately increasing your credit utilization ratio. In addition, it can lower your average credit account age–all of these aspects can adversely affect your credit score.

The great news is that after negotiating your debt and fulfilling your agreement, high balances and additional late payments won’t be recorded on your credit card report. You can easily rebuild your credit score with no negative information on your credit history.


If you’re facing financial hardship and are late on your payments, speaking with your creditor is crucial. Communicating with your credit card company can help avoid additional fines and protect your credit score. In addition, knowing your options for negotiating and working with a reputable credit repair specialist, like those at The Phenix Group, to create a comprehensive plan can help you manage your credit card debt.

Want to know if switching banks can hurt your credit? Take a look at our latest post.

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