How to get CC companies to settle.

[strugglingda]

To stop paying on the cards first, is this only way to get the CC cos to settle? If you are current on the payments and in good standing with all the cards, what would be the best way to initiate negotiations on settling the debts? I'm paying off on a Chase card at 2.99% for life of the loan. Started with about 30,000 5 years ago, and brought the balance down to about 10,000 today. All of a sudden they jacked up my minimum payment to 500 a month (was paying about 200). When I called to complain, they gave me the option to go back to the previous minimum payment and start paying 8% or the new higher minimum payment stays. Isn't that a breach of contract, since the original agreement is 2.99% for the life of the loan if my credit remains in good standing, which it has? What leeway do I have in this situation. Really p*ssed like hell. This is like blackmail with completely self-serving concocted excuses. Appreciate any advice you can offer. Thank you.

[MiSSMaGoo]

Not sure if this really applies for this situation but thought I would put it out there for others to read as well. But I work for a creditcard company and the majority have a hardship program for these economic times. However, the bank I work for doesn't offer it out we can only enter the customer in it if they ask. Our hardship program basically freezes all finance charges for a minimum of 6 months and we can work with changing minimum dues. Just thought I'd say since some people might not be aware of this. =)

[strugglingda]

Miss, thank you for the reply. If I sign up for hardship, what will that do to my credit score? Thanks again.

[BigJohn]

Some people who have tried signing up for hardship programs have found that there account gets closed and/or are made an offer to pay off the debt.

[Flamingo]

Miss, thank you for the reply. If I sign up for hardship, what will that do to my credit score? Thanks again.

Many credit card companies have increased payments on accounts or lowered credit limits in this economy. They didn't change your 2.99% on your account but are requiring you to pay a higher minimum which they can do if you read the contract you signed. They didn't change your interest; they changed the amount of required minimum payment which is allowable. They gave you the option to continue your lower payment but with higher interest and if you accept that, it would cancel out your former 2.99% agreement. It's all there in the fine print brochure you were given when you signed for the credit card.

As to your credit score, it more than likely will take a hit if you sign up for hardship payments through any of your creditors.

[BKINAZ]

If you are current...amazingly they don't care about negotiating with you. Foresight is not their best sense.

[OhioFiler]

If you are current...amazingly they don't care about negotiating with you. Foresight is not their best sense.

I think it makes perfect sense. Why negotiate with someone who is making the payment we ask them to make?

I don't think they really care if you default. Their business models and accounting procedures allow for a certain amount of default. They'll keep collecting payments from you as long as possible before turning you over to the in-house collectors. Then you're nothing more than an accounting transaction which reduces their accounts receivable and offsets their bad debt reserves.

In fact, they need a certain amount of default to justify the bad debt expense and subsequent reserve created to show the public auditors and IRS auditors their calculations are valid.

The decision to sell your debt is nothing significant either. You've already been removed from the books as a viable receivable and the sale of your debt to a collector is actually an income producing event.

[BKINAZ]

I think it makes perfect sense. Why negotiate with someone who is making the payment we ask them to make?.

I don't disagree...I mean the most common used line they hear is probably, "if you don't settle with me I'll just file for BK." But using me as an example, with my debt layed out for them...you'd be an idiot not to settle AND THEN they can do everything you are talking about. (write off)

[treehugger1]

BK, Yes, I have often asked creditors/CA's to take a look at my credit report and they will see the problem. LOL. I was working with many creditors for several months, but then it took one setback to screw it all up. Unless you are convinced you are not going to file, why attempt to negotiate at all? By the time your account is so far past due, your credit will be trashed anyway. I do agree that it is unfortunate they will not negotiate reasonable terms in the early going, but that's their model.