Top 7 Credit Card Lenders Review the Best at Offering Debt Relief

There are many sources for rating credit cards using points, rewards, and fees as the main criteria. What follows is a debt relief version of “rank a bank” where I apply my experiences; feedback from people settling credit card bills on their own; trends for each bank that apply today; and each banks past offers for debt relief, as a ranking tool. Most people reading this will care more about what relief is available from these lenders today. But I have included some review of past behavior in order to better organize the list.

If you need debt relief and help from your credit card lender, predictability and flexibility are 2 major considerations for how the below list is ordered.

1. Chase credit cards take the number one slot.

This may surprise many readers due to how much Chase gets hammered in the press and media for a host of issues. The state of California has sued Chase for past collection practices. There is still a pending announcement regarding penalties against Chase at a federal level as a result of the same practices the California Attorney General is suing for. Chase even stopped directly suing their card members as a method for credit card collections, and has all but stopped selling their unpaid credit cards into the debt buying market. But all of that happens around policies and procedures for accounts that charge off. This review focuses on debt relief before credit cards reach 6 months late.

Predictability: Chase has been settling pre-charge-off credit cards with their card members for between 25% and 40% for years. While there are instances where settlements are higher, they are for predictable reasons.

Flexibility: Offers settlement with 94 days to pay (split the payments up) before charge off.

History: Even while suing more card members a few years ago, Chase card members were consistently able to get 35% to 40% settlements pre charge off, and even with post charge off accounts sent to Chase legal (sometimes even after a lawsuit had been filed).

Active page to discuss settling with Chase.

2. Bank of America could arguably be at the top.

Anyone who knows the debt relief market well enough to put together their own debt relief ranking list, could argue Bank of America should be at the top. Bank of America, like Chase, is no stranger to negative press, and for some of the very same issues. But here again, sticking with predictability and flexibility, Bank of America wins second place when it comes to settling your credit card debt yourself – directly with your bank – and before charge off.

Predictability: Bank of America currently settles credit card debts for between 25% and 40% before sending your accounts out to debt collectors and debt buyers after charge off.

Flexibility: Offers the 94 day settlement payment terms prior to charge off.

History: Had I been publishing this in 2008 and 2009, Bank of America would be at the top of this list by a huge margin. At the height of the recent recession BofA settled credit card debts consistently for as low as 15% of the balance owed. Prior to the recession, BofA remained fair and consistent with settlement offers you could negotiate with them on your own.

Active page to discuss settling with Bank of America.

3. Wells Fargo rounds out the top 3 for consistency not savings.

Wells may not issue as many credit cards as some of the banks that follow, but they could teach a couple of them about stable recovery policies.

Predictability: I have long estimated settlement percentages for Wells Fargo credit cards at 40% of the balance owed. I still do. But enough 35% settlements are accomplished by people settling with Wells Fargo on their own, that I find that to be a realistic target prior to 6 months delinquent.

Flexibility: Wells Fargo may not always offer the 94 day terms. There have been instances where the better savings percentage has come from lump sum single payments.

History: Wells has been one of, if not the most stable credit card banks over the last 10 years when it comes to working with their customers to resolve debts before they get dropped into the different collection buckets. The American Bankers Association ran a story recently about how Wells Fargo started tapering off selling charged off accounts to debt buyers last winter, and has now ceased all sales to debt buyers. This change won’t likely last long, and I do not think it will impact pre charge off settlements with Wells Fargo.

4. Discover Card debt relief reminds me more of a credit union.

Some readers could legitimately make a case for Discover being at or near the bottom of this list. But if you are looking for debt relief versatility and flexibility amongst major credit card issuers, Discover Cards delivers. Just in some unusual ways.

Predictability: Discover trends today are settling credit cards (on accounts that qualify) for between 40% and 50%. There are some limited instances where settlements have been lower. Discover tends to not offer the 94 days to pay on settlements, preferring to get a single payment when settling before they charge off the account and place it for collections. But Discover is one of few creditors to offer a 60/60 plan to some of their card holders. This is where they offer to reduce the debt to 60% of the balance and spread the payments on that amount over 60 months. Discover does not sell much to debt buyers. And they are one of the more aggressive creditors to place accounts with attorneys for collection after charge off. If the focus of this ranking and review were anything other than pre-charge-off settlements, I would not have them at number 4.

Flexibility: Discover provides a different type of flexibility like mentioned above. Where Discover may not offer the 3 month payment terms; the 60/60 plan; as well as some of the strategic ways I have helped people navigate a Discover settlement when juggling other accounts; combined with a good reduction on their balances; places them above the remaining banks for this category.

History: Discover has been fairly predictable with settlements for the past decade. They do tend to get stubborn with settling, and the amounts they will settle for, when your accounts are very new. They have long had the reputation for placing more accounts with attorney debt collectors after charge off, than other creditors.

Active page to discuss settling with Discover Card.

5. Citibank is a little bipolar with debt relief.

When it comes to settling with their card holders, it is hard to pin Citibank down for predictability, which is such a huge element for developing a successful DIY debt settlement plan. This fact combined with the other things I will lay out puts them near the bottom of my rank-a-bank debt relief review.

Predictability: Depending on the account, targeting 50% for settling your Citicard is the most realistic expectation to set. Citibank also services other credit cards like Sears, Lowes, and Home Depot. These branded cards can at times be settled for 40%, but often after they are placed for outside collections. When I put a debt settlement plan together that contains 3 accounts; one with BofA; one with Chase; and one a Citicard; I often target settling the Citibank card with a collection agency after charge off (if you had only enough cash resources to settle 2 accounts before charge off).

Flexibility: Offers to settle with the 94 day payment terms like other banks.

History: Over the last 10 years, I have watched Citibank go from being the most likely to sue; to offering to settle in a mailed letter for 35% at just past 90 days late; to offering great temporary hardship plans; to offering none; to settling at 60% as a floor; and even not offering any settlement at all. They do tend to sue for collection a great deal less than in years past, and due to the current collection environment, I don’t expect them to get more aggressive again soon. I do wish they would quit selling their debts to Unifund (a debt buyer), but I will save that commentary for the upcoming rank-a-debt-buyer post.

Active page to discuss settling with Citibank.

6. Capital One is not great for debt relief.

The offers to settle credit cards with Capital One have been on again off again. That is only part of why they are this low in my review.

Predictability: Capital one settlement percentages before they charge off your account are currently 50%, sometimes a bit higher, rarely a touch lower.

Flexibility: You do have opportunities to settle over a few payments like with other accounts, but there are instances where a single lump sum is all that is on the table.

History: Capital One is the most prone to sue for collections than any other credit card issuer on or off of this list. Recent reports by investigative journalists show that Capital One sues more in Hennepin County MN, and Cook County IL, than anyone else, and by a large margin. One of the biggest issues is with how they have reported settled accounts with a balance still owing on your credit report. I do expect that practice to be curbed due to the supervisory authority of the CFPB, so if you experience this, post about it and let’s bring more attention to that practice.

Special note: Capital One fills a void for people starting off with building credit, and they offer good products to those who need to rebuild credit. Last I knew, they offered the best discretionary income calculation to qualify their accounts into a reduced monthly payment debt management plan with a nonprofit credit counseling agency. If they could rework their recovery policies, and their compunction to sue, they would be closer to the top of this list.

Active page to discuss settling with Capital One.

7. American Express misses on debt relief.

AMEX lands at the bottom of this review for a couple of key reasons. Not the least of which is that you will rarely settle with American Express directly. The accounts that I have worked on as the negotiator (settling direct with AMEX), were done through a very small hardship department. That department had usually only been available when there were severe and sincere hardships – of a type that someone is not going to bounce back from. To their credit, the department has been wonderful to work with and extremely fair with the outcomes.

Predictability: Settling American Express accounts is a bit all over the map. The vast majority get settled with outside collection agencies and attorney debt collectors. The target amounts can range between 35% and 60% depending on who the account gets placed with, and how long the account has gone unpaid. There are instances where settlement is simply not on the table.

Flexibility: There are cases where settlements can be paid over 6 or even 12 months (after charge off). It will depend on who is collecting for AMEX. The lower percentage and best savings offers for settling tend to be when agreements are paid in a single lump sum.

History: American Express is a bit of an anomaly compared to all other credit card issuers in the US. To my knowledge, they have never really built out an internal collections and recovery department with long term goals. They have not sold charged off credit cards into the market. They maintain a black list of their account holders who default, making it more of a mistake if you ever get another Amex credit card product again. Their practices with business cards are odd too.

Active page to discuss? There really isn’t a dedicated page for settling with American Express. Settlements with AMEX are typically done with a collection company. You can type in the name of the collector in the search box at the top right of the page and click on the best result to join the discussion for that collector.

How do other credit card lenders rank for debt relief?

The above lenders combine to control more than 60% of the credit card market in the US. There are pages on this site with ongoing feedback and discussion about settling with many of the credit card lenders you do not see listed here. Use the search box to find more information about them. If there is no page on this site about your creditor, or a debt collector you are dealing with, you can start one by using the Ask Michael feature.

The above is provided for general information. You can use the predictability for what each creditor may settle for as a base line for your planning. There are reasons why you may be able to settle for a better rate, or not be able to settle at all. I cover these variables throughout the debt settlement section of this site. I will update this review with new information as trends change, which is inevitable. You can join the discussion for settling with each one of the creditors linked above, and are welcome to post in the comments section below for feedback.

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About Michael Bovee

Michael started CRN in 2004 with a mission to provide detailed debt and credit help and advice that encourages and allows people struggling with debt to solve their debt problems just like a pro - but without the high fees.

Comments

  1. Michael,

    I respectfully must disagree with your conclusions about Chase and Bank of America. They make it virtually impossible to settle debts at all. Bank of America is particularly egregious. I have clients with debts with them and when I go to settle, they refuse to speak to me (an attorney) unless my client sends a power of attorney. When I fax one over, they say its no good and that I have to have an original signature. I send that and its no good as it does not have a Social Security number and date of birth. I send that and I am told that I should not have mailed it (how else to show an original signature???). Then after all that I have to complete a statement of compliance with the Telemarketing Sales Rule. And they are no longer giving fabulous settlement deals – they are closer to 40%-50%.

    Chase is almost as bad. They refuse to speak to anyone other than the client and even though I am an attorney they lately have been refusing to speak to me because I live in a state that differs from some of my clients. I am licensed in PA, GA and NC but live in NC (gotta live somewhere!) and my clients are predominantly in PA and GA.

    I have thrown up my hands. If Chase and Bank of America are going to throw these obstacles in the way and if the clients have numerous debts, I will settle those first and hope that my clients get past the statute of limitations before I will have my clients pay these entities, both of which are criminal enterprises in my view (read the whole host of articles by Matt Taibbi of Rollingstone for a detail of their crimes).

    Discover will settle for between 30% and 40% and so will Wells Fargo and American Express. While not great, I can at least talk to them. And while you bash Citi (and rightly so because they claim its their policy not to deal with lawyers) I have at least found their legal counsel to be much more amenable and reasonable.

    There is no negotiating with Capital One – they know only one one thing – no debts will be settled for less than 5o% ever.

    • Michael Bovee says:

      Thanks for posting your experiences Rachel. The reviews assume you are negotiating a settlement yourself directly with your creditor.

      I do know that Bank of America began complicating the process for attorneys and debt settlement companies a while ago. But customers working directly with BofA do not experience complications, and regularly settle for less the 40%.

      Chase changed their third party policies in the fall of 2009. Before those changes, and since, Chase has consistently worked with their credit card members to resolve debts before they drop the accounts into what is now a somewhat stalled out collection pipeline.

      I have seen some settlements with Discover less than 40% prior to charge off. Just not consistently enough to publish them as a realistic target. Same for Wells Fargo. With Wells, the larger the balance, the more likely the incremental savings. I have always had a tendency to pad my estimates by 5%, and that will often show through on this site.

      I suppose describing Citibank’s collection policies prior to charge off as being bipolar could be viewed as bashing, but it was not my intent. I used that term as a description because it just seems to fit the on again/off again, softer stance/harder stance changes over the years.

      A friend and industry pro pinged me about Capital One after reading the review. He suggested they be at the bottom of the list, and that 50% deals are just not that common right now. I have seen enough consumers this year hit the 50% target for settling directly with Capital One, but may edit the target after gathering some more information. Recently I had a member get just under 50% on one account direct with CapOne a few days prior to charge off, and get 55% with a contingency collector for his other Capital One account shortly after that. I have also seen refusal to settle no matter the condition of the file.

      I hear you on the Taibbi pieces. If I were to include factors other than the above banks flexibility and predictability of offering debt relief to their credit card customers before charging them off, the review would come out very different.

  2. From my recent experience, Chase, BofA and Disc were fairly easy to negotiate good settlements with.

    Disc was done just before Charge Off at 36% of original balance before all the late fees. BofA, the same, at 27%. Chase was a little goofy. They wouldn’t come down to 40%, then it Charged Off and went to collections. Two different collection companies quickly took 27% and 32% (before any late fees). Now I have to the work for filing for insolvency on the taxes.

    Cap One has Charged Off, so I’m still waiting to see what they will do.

    • Michael Bovee says:

      Thanks for posting your results Charles. The Chase outcome was goofy. They send collections out to contingency collectors, so they paid out to collect less than would have been the case otherwise. Odd stuff can happen with virtually every creditor and collector out there.

      You may have one of the accounts Capital One does not bend very far.

  3. hi, love your site. If I handle debt reduction myself with the credit card companies, will I have to make lump sum settlement payments to them ,or will they accept a monthly direct payment installment?? This could be a problem if they only accept lump sum payments. If you can”t make lump sum payments, wouldn’t it be better to use a debt reduction company. What is your opinion of the company, Curadebt ? Are they reputable? !8% fee

    • Michael Bovee says:

      steve – You can negotiate settlements with creditors where you get a reduction AND time to pay. Settlements prior to charge off will not typcially be allowed to exceed payment plans more than 94 days. Settlements done after charge off (typically more than 180 days since last payment) are often available with very flexible monthly terms. But all of this is situational (from one account, one debt collector or debt owner, to the next.

      Negotiating your own settlements is not rocket science, but there is a science to it. If you post the balances and the creditors for each I can better help you estimate what you will need to save up, and over what period of time. You can then add in Curadebt’s fees to that and estimate how long all this will take.

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