How to settle your credit card debt

If you're having trouble making your credit card payments, you may find help in the most unlikely place–your credit card issuer. As more Americans fall behind on their bills, credit card companies are having to write off this debt. To cut their losses, issuers now appear to be more open to settling or negotiating a payment plan for your credit card debt according to Lowcards.com. Here's your best strategy for cutting a deal.

1) Get in touch with your lender

If you've lost a job or your monthly payments are just unmanageable, call your credit card company before you miss the first payment. Your lender may be more willing to work with you. Ask to have your interest rate lowered or try to negotiate a payment schedule. Banks are generally more willing to change the terms of your contract than to forgive your balance.

2) Getting your debt settled

Credit card companies don't have hard and fast rules about who qualifies for debt settlement. In general however, if you're 90 days or more delinquent on your credit card bill and there's no hope of paying off your card, your lender may offer to settle, or forgive a portion of that debt. Make sure you call your lender and ask about this option. But keep your expectations in check. It's unlikely that all–or most– of your credit card debt will be wiped away. And beware that if you do settle some of your debt, it may be reported to the credit bureaus as a settlement. And that could hurt your credit score for years to come. On the other hand, if the settlement is reported as "paid in full" on your report, it may not have a negative impact on your score. Make sure you ask exactly how it will be reported to the credit bureaus. In addition, if the portion of the forgiven debt is over $600, you will have to pay income taxes on that amount.

3) Forget third-party debt settlement companies

Don't buy into ads from companies that promise to cut your debt in half. They usually charge high fees for services you can perform yourself for free. If you aren't able to negotiate at all with your credit card company, seek help from a non-profit accredited credit counseling agency like the National Foundation for Credit Counselors. Counselors can negotiate with credit card companies on your behalf and you may be put on a debt management plan to help you pay down your debt.