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.
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.
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 settlement policies are unique.
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 settlement.
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 amount saved from debt negotiation.
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 in my review for settling debt.
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. Here is a post about settling with debt collectors for AMEX, and one for negotiating with Zwicker and Associates (national attorney debt collection firm that does a ton of file work for AMEX).
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.
If you are having difficulty hitting these targets when you are negotiating debt yourself, there may be a good reason for a banks reluctance to offer you better savings in a settlement. You can call and talk to me about it at 800-939-8357, press option 2. You may be going about it wrong, or have an account history that makes settling more challenging.