Will Credit Card Companies Negotiate Lower Rates with Customers who Fall Behind on Their Payments?

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The loss of employment, unforeseen medical expenses, and unexpected emergencies arise that may cause us to be late on our credit card payments. Is it possible to negotiate with credit card companies for a lower monthly payment? Will credit card companies be willing to reduce interest rates and fees so that we can afford to catch up on monthly credit card payments? With a debt reduction plan in order, credit card payments may be reduced to make them more affordable for cardholders. Credit card issuers may agree to work out a debt reduction plan that cardholders are satisfied with.

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Most credit card companies wait until payments are at least three months late before they are willing to negotiate with cardholders. Some wait as long as six months. By this time, credit scores are affected making it difficult to borrow money in the future.

Before hiring a debt settlement company, try to negotiate directly with the credit card company to get monthly payments lowered. According to the FTC (Federal Trade Commission), debt reduction plans should be worked out with a credit card company rather than a debt settlement company.

If an agreement cannot be reached, interest rates and other fees will begin piling up, making it even more difficult for cardholders to catch up on credit card payments. The 2010 Credit Card Accountability, Responsibility, and Disclosure Act states that credit card companies' profits could be hampered when they charge additional fees and higher interest rates. This means that credit card companies may be more willing to work out a debt reduction plan that can help cardholders catch up on their late payments.

Without some type of debt reduction plan, the cardholder may have to go to court. The cardholder and a representative of the credit card company will work out a payment plan that they can both be satisfied with, although the judge will make the final decision. The balance owed on the credit card will include interest rates and other fees, meaning the balance may end up being much higher than before the cardholder started falling behind on their monthly payments.

It is the wise credit card holder who addresses the issue of late payments with the credit card issuer as soon as they begin falling behind, although most card issuers will not negotiate until card holders' monthly payments are at least three months or even six months late.

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