Credit card companies may settle for a negotiated amount equal to roughly 40-60 percent of the balance owed, according to the BBB. Credit card companies tend not to publicize settlements, so there are no hard statistics on success rates or settlement amounts. But a creditor won’t accept less than you owe if they have reason to believe you’re capable of paying the full amount.
Credit card companies are most likely to consider debt settlement if collecting more than the proposed settlement amount over time seems unlikely or not worth attempting. As a result, debt settlement usually comes into play after several missed or late payments. Plus, the more money you have for a lump-sum payment, the more likely debt settlement will be.
You should make every effort to negotiate with the credit card company yourself, rather than hiring a professional debt negotiator. If you choose to go at it on your own, make sure you get any settlement agreements in writing. Should an issuer refuse to even negotiate a lump-sum settlement payment, request that they instead reduce your card’s APR or lower your monthly payment as part of a debt management agreement.
If you owe multiple lenders, also consider debt consolidation. This will provide you with a single payment and (hopefully) a lower interest rate. You can consolidate car loans, student loans or other balances along with your credit card debt.
Finally, keep in mind that settled accounts will negatively affect your credit report and lower your credit score. Typically, a settled account will remain on your report for up to seven years.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines
. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.