Credit card delinquencies are on the rise, climbing 11 percent in the first quarter of 2009. And all signs indicate that the number of delinquencies is expected to grow into 2010, perhaps even 2011. But now, creditors are trying to get whatever they can out of delinquent accounts. Rather than trying to squeeze water out of sand—i.e., money out of a person who currently has no income—credit card company reps are listening to all offers. In many cases, that means if you’re able to pay off half your balance, creditors will close the account and call it a deal.
Most creditors refuse to address the practice publicly, but The New York Times reveals that many credit card operations will accept less than full payment—sometimes much less than full payment. Customer service representatives may first off a settlement of 80 percent of the account balance, but that’s just the beginning of negotiations. If an account is delinquent for six months or more, creditors understand that chances are the debt will never be paid. And so, creditors eager try to get whatever they can in the three-to-six month period. They’d rather get something than nothing.
So, if you’re in the delinquent category and of the resources to pay off, say, half of your account, make your credit card company an offer. In many cases, the customer service agent won’t even have to call in the manager for an OK. It could be a quick done deal, and everyone can move on.
On a side note, guess what area leads the country in credit card delinquency? The one built on gambling, Sin City. According to first quarter stats, 2.6 percent of Las Vegasans (Vegans? That’s not right) were delinquent in paying off credit cards. Seems the housing market is one big reason why more and more people are delinquent of late. The two areas just behind Vegas in terms of delinquency—Miami and Stockton, California—were likewise hit hard by the housing bubble.