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, surpassing $1 trillion. In addition, 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 a record high for the fourth quarter in Q4 2018.

Source: WalletHub


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

Source: WalletHub

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

Source: WalletHub


These are incredibly stressful times, 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.” However, even though it may be stressful, you may want to pick up the phone because the creditor or collector may 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. Instead, they want to know if you are experiencing a hardship and what you will do to get back on track.  Based on your situation, developing a few sentences you can consistently use when you talk with your creditors is helpful.   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 lose the property if you don’t pay, 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 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 spoke 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

Please 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

Before talking with debt collectors or creditors, look at your budget and determine 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.  Working with the company where you have the original debt is usually more manageable and less demanding.  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

When you establish a repayment agreement, ensure that the collections agency or creditor provides the terms in writing.  Never leave it in their hands.