8 Tips to Negotiate With Your Creditors

Americans’ have collective consumer debt that has hit the $4 trillion mark.  According to Experian, the average American has a credit card balance of $4,293.  The Federal Reserve found that total credit card debt is also at its highest point ever, surpassing $1 trillion.  More than 1 in 3 people — or 86 million Americans — said they’re afraid they’ll max out their credit card when making a large purchase.


Outstanding credit card debt is at the highest point since the end of 2008, after reaching an all-time record high for a fourth quarter in Q4 2018.

Source: WalletHub


We ended 2018 with $66.7 billion in new credit card debt, and WalletHub projects a $60 billion increase in 2019.

Source: WalletHub

The $58.1 billion in credit card debt added during Q4 2018 is 35% higher than the post-Great Recession average for a fourth quarter.

Source: WalletHub


These are incredibly stressful times and it is exacerbated by the seeming insufficient job opportunities and struggles to make ends meet.  In addition, an ever increasing number of Americans are falling behind on their bills.  If a debt collector or creditor calls about a balance that they can’t pay, the last thing that they probably want to do is “talk with them.”  Even though it may be stressful, you may want to pick up the phone because the creditor or collector may actually be willing to negotiate or make concessions.

Here are 8 Tips for Negotiating with Creditors and Collection Agencies

1. Stick to Your Story

The person negotiating with you doesn’t wish to hear all of the details about why you aren’t able to pay your bill.  They just want to know if you are experiencing a hardship and what you are going to do to get back on track.  Based on your situation, it is helpful to come up with a few sentences that you can consistently use when you talk with your creditors.   Always be truthful and consistent because you don’t want your situation to backfire.

 2. Avoid Drama

Remain calm, no matter what the collection agency or creditor says.  It is counter-productive for you to lose your temper.   

 3. Ask Questions

If a collector says you’ll be sued, or that you’ll lose property if you don’t pay, just calmly ask for specifics.  A good question is, “When will I get my notification of this lawsuit?” Or “When will you take the money from my bank account?” Often, threats of this sort are illegal and the more information that you can gather, the better.  

 4. Take Notes

Have a pen and paper handy, so you can take written notes whenever you talk with a collector. Write down the name of the person you talked to, when you talked, and what was discussed. Not only can this help you take the emotion out of the situation, but you’ll also have a record if the creditor or collector broke the law in their attempts to collect.

 5. Always Read & Save Your Mail

Don’t throw away mail from your creditors or stuff it in a drawer. Open it, read it, and save it in a file.

 6. Know How Much You Can Afford to Pay

Look at your budget and determine, before talking with debt collectors or creditors, how much you can reasonably afford to pay.  

 7. Negotiate With Your Creditors, Not Debt Collectors

Before your account goes to a collection agency, try to negotiate with your creditors.  It is usually easier and less onerous to work with the company that you have the original debt with.  You will have late charges, but the impact of your debt going into collections will be worse.  

 8. Make Sure You Get it in Writing

Whenever you establish a repayment agreement, make sure that the collections agency or creditor provides the terms in writing.  Never leave it in their hands to tell the truth. 


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