Tens of millions of Americans have some debt, and you may be one of them. If you are, chances are you know the pain of negotiating with creditors who couldn’t care less that the majority of the debt you’re carrying — and struggling to pay back — is for the education you needed to get the career you’re in now. It’s the worst kind of catch-22, but you needn’t feel helpless. The next time creditors come calling, use these three strategies to take control:
1. Ask for a better deal
Sound crazy? It isn’t. According to a March 2016 survey from CreditCards.com cited by Bankrate, 78 percent of customers who asked for an interest rate cut got one. If that sounds high, it may be because only one in five customers actually ask for a reduction.
Don’t be content to be among the 80 percent who assume they can’t get a better deal from a creditor. At the very least, negotiating politely with creditors shows them that you’re paying attention and won’t be stuck in a bad situation if you can get something better.
2. Ask to change when bills are due
Sometimes, the person on the other end of the line doesn’t always have the authority to get you a better deal. Fine. Negotiating with creditors doesn’t have to begin and end with discussions about a better rate. You can also discuss terms. And since you’re a freelancer with an often-unpredictable income, flexibility in how and when you pay bills is important. Say you tend to get most of your income in the first half of every month. Asking for due dates that coincide with your payments isn’t unreasonable, and certainly in the interest of creditors who want to get paid.
3. Threaten to take action, and be prepared to make good
If all else fails, threaten to transfer your debt elsewhere. Just be sure to do your research first. Say you have $15,000 in student debt left, and you’re tired of endlessly negotiating with creditors over your payments. Spend some time researching the cost and terms to move that debt to a different lender. How much could you save? Could you be reasonably assured of approval? Talk with alternative lenders, take good notes and have them at the ready when the next harassing call comes in. If your creditor responds to the threat with a new deal, great. If not, you’ve done the homework to get a better deal on your own, elsewhere.
Negotiating with creditors can feel like pulling teeth, but these simple strategies can improve your odds of success — and your cash flow. Ask for a better deal or better timing, and take action if you need to. You may be in debt, but you have rights just like everyone else. Be assertive. You might be surprised what you get in response.