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You're smart enough to know that there are certain words that you shouldn't say when talking to your credit card issuer. But life is unpredictable, isn't it? So just in case you find yourself in a situation where you need to use one of these "unspeakable" words, here are some tips to minimize the negative impact.
1. Unemployment: Credit card issuers don't like to hear that you're out of work. This word makes them think of another word--write-off.
If you have to say it: Stress how proactive you're being in your job search. Don't whine, "I've been looking for a job for six months!" Instead, stay calm and sound confident that you're sure you'll find work soon. And when you do, making the minimum payments again will resume. Negotiating a lower interest rate is a good idea, too.
2. Divorce: These situations can get messy in a hurry. Card issuers have dealt with situations where it was a joint account, but one spouse did most of the spending. And guess what happens? It gets disputed and no one wants to pay.
If you have to say it: Don't bash your spouse, but be clear that the individual who made the purchases will be paying the debt as soon as the legalities are settled.
3. Bankruptcy: Filing for Chapter 7 bankruptcy wipes clean all unsecured debt--and this includes your credit cards. (With Chapter 13 bankruptcy, you agree to repay creditors over 3 to 5 years). Once your issuer knows this, your FICO score will drop about 100 points.
If you have to say it: If bankruptcy is in your future, you'll be required to receive credit counseling. At that point, you'll be advised about how to proceed and how creditors will be notified.
4. Write-off: By the time it gets to this point, your account will be handed over to a collection agency. Try to prevent reaching this stage by negotiating a lower interest rate or a due date that works better with your cash flow.
If you have to say it: This is a last resort. Don't say this word unless you've exhausted all other possibiltites for repaying your debt.
5. Foreclosure: As long as you can stay on top of your credit card payments, don't share this with your issuer. There's simply no reason to make your issuer think you might have problems paying your next credit card bill.
If you have to say it: If it does impact your ability to make your minimum credit card payments, go ahead and discuss the situation. But be ready to say you have a plan in place for paying off your debts.