If you’re swimming in debt, you may be able to get lower interest rates and gain more control of your finances by negotiating with your cred-itors. Does the thought of bargaining with credit card companies and banks seem daunting? Try these strategies.
1. Research and prepare. Before initiat-ing negotiations, gath-er information about your debt, the current interest rates offered by competitors and your payment history.
2. Start early. Reach out to creditors before you’re in serious financial trouble. Explain your situation honestly, highlighting changes in income, unforeseen expenses or other challenges that affect your ability to make payments.
3. Be polite. Maintain a respectful tone throughout the negotiation. Creditors are more likely to cooperate if you engage with courtesy and demonstrate your commitment to resolving the debt.
4. Have your terms ready. Propose a lower interest rate based on your research. Be prepared to provide evidence of compet-ing offers or a track record of timely payments. Suggest a temporary rate reduction or a revised payment plan if needed.
5. Get it in writing. Once you’ve reached an agreement, ensure you receive written confirmation from the creditor. This will help avoid any misunderstandings later.
You can also solicit the help of a debt settlement company that may be able to negotiate better payment terms on your behalf.
