If you owe money to a credit card company, there is a good chance that the company will do whatever it takes to obtain what is owed. Fortunately, your lender will likely be willing to work with you in the event that you can’t make a future payment in a timely manner. Here’s a look at why a Michigan credit card company would negotiate new payment terms with its customers.
Unsecured debts are harder to collect
Credit card balances are considered to be unsecured debt. Therefore, a lender has little recourse to recoup its losses if you fail to pay an outstanding balance. While it may be possible for a creditor to garnish your wages, seize a bank account or take other steps to get your money, these steps can be costly and inefficient to take.
Something is better than nothing
Credit card companies know that customers are more likely to make at least a partial payment if they are given an opportunity to do so. This is especially true for those who have good credit and want to preserve their good name.
Being flexible is a sign of good customer service
Lenders want to make as much money as possible, and an easy way to do this is to offer outstanding customer service. In addition to increasing the odds of obtaining at least a partial payment in a timely manner, working with consumers reduces the chances that they’ll transfer their credit card debt balances to other card providers.
If you need help paying your credit card debts, it may be in your best interest to talk to your lender. Doing so may help to reorganize your debt without the need to file for bankruptcy or take other actions.