Negotiating with creditors

The biggest secret in consumer finance: prices and interest rates on debt are often negotiable, and creditors would rather take 60 cents on the dollar than watch you default. The problem is nobody tells you that you're allowed to ask.

Credit card APR reductions

Call the number on the back of your card. Ask for a retention specialist. Say: 'I've been a customer for X years, my account is in good standing, and I'm looking at offers from other issuers. Is there anything you can do about my APR?' They will often drop your rate 2–5 percentage points on the spot. Cost: 10 minutes. Savings: hundreds per year.

Medical debt

Hospital bills are the most negotiable debt in existence. Nearly every hospital will give 20–50% discounts for lump-sum payment, and many will waive balances for patients who qualify for financial assistance (your income doesn't have to be low — 400% of the federal poverty line is the common threshold).

Debt in collections

If a debt has been sold to a collections agency, the agency paid 2–10 cents on the dollar for it. They'll often settle for 30–50%. Get any settlement offer in writing before you pay. Never, ever give a collector access to your bank account.

The script that works

“I want to resolve this account, and I can pay [X% of balance] today as a full and final settlement. Can you confirm that amount and send me a letter confirming the account will be closed as settled in full?”