If you’re feeling overwhelmed by debt, know that it’s not just you. Americans added a record-breaking $61 billion in credit card debt in the last three months of 2022 alone, according to a report released by the Federal Reserve Bank of New York. 

Younger borrowers are especially affected, with people in their 20s and 30s increasingly struggling to make their payments. Data from the Federal Reserve Bank of New York also shows that credit card balances are up sharply, with the average balance at $3,283. And with the average credit card interest rate currently at 20.92%, carrying a balance can be very expensive.

Even if managing your debt feels hopeless, you have options, like working with your credit card company. Learning how to negotiate credit card debt can help you stay afloat during difficult times. It might even reduce what you owe.

Yes, it’s possible to negotiate your credit card debt. In fact, if you’re struggling, it’s a good idea to reach out to your credit card company as soon as possible to let them know. The sooner you contact them, the sooner you can solve the problem together.

Negotiating your credit card debt can be a win-win. You get the help you need to escape from your burdensome balances, and the credit card company still gets to recoup at least a portion of their money. 

“At some point, the creditors will be focused on getting some money from you rather than it just getting written off as bad debt,” said Jay Zigmont, a certified financial planner who has a doctorate in adult learning. “You may be able to offer as low as 25% to 30% of the total debt in order to settle it in full.” 

For example, if you owe $10,000, you might be able to settle your debt for $2,500. The key is that you need to have the full $2,500 available before you begin negotiating, Zigmont said.

Credit card debt settlement is an offer to pay off your credit card debt under different terms than you originally agreed to. You might pay less than the total amount when you settle your credit card debt.

When you settle your debt with the credit card company, you both must agree to these new terms. If you fulfill the terms, the credit card company will consider the debt paid off.

There are different types of credit card debt settlement. The one that’s best for you will depend on your circumstances as well as the credit card company’s policies (and flexibility).

A lump-sum settlement lets you pay the whole balance at once, usually for an amount that is less than the total amount you owe. The credit card company agrees that this new amount will settle the debt.

A hardship agreement or hardship program is designed to help you through specific situations that put you in financial hardship, such as being laid off. You can get temporary relief through these programs.

Under a workout agreement, the credit card company may agree to make changes to help you pay down your debt more easily, including lowering the payments or interest rates.

Your first step to negotiating is knowing where you stand. Check your credit card statements or online account and look for the following information:

You’ll also need to know your total monthly income and other debt obligations, so you know how much you can afford to pay toward your credit card debt each month.

Once you know how much debt you have, reach out to your credit card issuer. Let them know your situation and tell them you’d like to work with them to find a solution. If your struggles are due to job loss, medical bills, or other unexpected expenses, let them know that, too. It could help them decide whether to offer a hardship agreement.

Ask the company whether it’ll offer a payment plan, a hardship program, or a payment assistance program. This lets you repay your debt in regular installments, so you’re still making payments, but they’re more manageable.

Whatever you and the credit card company decide, make sure you get it in writing. Note the day and time you called, whom you spoke with, and what was agreed. Your credit card company may send you a form to fill out and sign; keep a copy of that as well. 

When the payment arrangement is in writing, you and the company can both refer to it if you have questions or concerns later.

If you need a little backup for your negotiations, there are professionals who can help. 

A debt settlement company can negotiate on your behalf, contacting creditors for you to offer a lump sum that settles your debt. Look for reputable companies with excellent ratings to avoid scams, and never pay upfront for these services.

Credit counseling is available from nonprofit organizations. This is a good option for helping you develop a workable budget, so you can get out of debt now and avoid it in the future, too. They can also help you design a debt management plan that might be able to reduce your payments, lower your interest rates, and eliminate fees.

If you prefer to tackle your credit card debt on your own, without negotiating, you can. Two main alternatives for paying down debt are using a balance transfer card or a debt consolidation loan. 

It may seem odd to use a credit card to pay off your credit card debt, but this technique takes advantage of the special features that balance transfer cards offer, such as lower rates. With this method, you transfer all your credit card balances onto one card and make payments on that card. 

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Another option is a debt consolidation loan, which combines your existing credit card debt into one new personal loan. You can also consolidate your debt using a home equity line of credit or a second mortgage.

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With a little work upfront, and some third-party help if you need it, you can get your finances back on track and pay off your expensive credit card debt.

Related: Learn more about getting a personal loan on Credible.com