If you are at this page, you are probably deep in debt, desperate, and scared .. just like me. Here is what the credit companies DON'T want you to know! Why am I posting this information on HubPages? Because I've been there. I had to figure all this out on my own. Now I'm sharing it with you. Hope it helps! --D.A.

The credit companies would MUCH rather have your money than your house/car/whatever. They don't want to deal with the hassle of collections, which is why many of them turn "bad debts" over to strong-arm collection agencies. They don't really want to resell your seven-year-old vehicle with the upside down loan that you're having trouble paying. The housing market is a special case at the moment, but even there the bank would rather have your money than your house. Foreclosure is expensive. [Unfortunately, it appears that our Congress is bailing out the mortgage corporations at the expense of individual homeowners, but more on that on another day.]

The credit companies are themselves in trouble at the moment, and YOUR debt counts as an asset for them. If they can keep your account, even if it's closed, rather than selling it off to a collection agency, they will do it, because the amount you owe goes in their ASSET column. If they write you off, it goes down as a LOSS, and they can't afford many losses against their profits in this economy. An example of a credit company in trouble is Citibank (whom we owe, coincidentally). My reasoning process is that if they can't manage their own money effectively, they've got no business casting aspersions at MY failure to manage money effectively. This logic helps keep things in perspective when talking to creditors. As corporations, they are in the same boat that we are as individuals.

The credit companies make TONS of money from shocking interest rates and (this is key) late fees. In fact, exorbitant interest and fees are the whole POINT of the credit industry in the first place. It's how they make their money. It is the foundation of their existence. And therefore, it is in their best interests NOT to kill their cash cows (i.e., the people who keep them in interest and fees). In other words, they want to keep your debt in-house in order to suck as much money out of you as they can. Okay, yeah, so you splashed out with rib-eye steaks and pink-wine-in-a-box at home with your sweetie for your birthday (instead of Ruth's Chris). Does that mean it's okay for the credit company to bilk you for THREE TIMES the amount of the dinner (once interest and fees are calculated)? You are not a bad person. The credit companies are using you like yesterday's cheap toilet paper. They are extorting money from you and making you feel bad about letting them do it. Does this sound like a healthy relationship to you?

Identity theft protection? Spare me. Whoever tries to steal my identity deserves what they get.

Basically, your creditors want you to think that they hold all the cards. It's true that the American economy is set up so that corporations have ginormous advantages over individuals. But there are strategies that you can use when fighting against the giants.

Keep the creditor's weaknesses in mind. I used Citibank as an example above. Right now, Citibank is in a weakened position. They are in financial trouble. Their strategy has got to be to jimmy their spreadsheets, just like Enron did. They are desperate to get money out of their debtors so they can keep the bad debt on their assets page. Furthermore, Citibank stands to make much more money collecting directly from the debtor ... if they sell your debt to a collection agency, they make only pennies for each dollar you owe. Citibank can't afford to write off bad debt. This gives you, the debtor, the advantage.

Call your creditor TODAY and nurture the relationship. Personally, I hate this part. But your creditor will be MUCH more willing to play ball if they can just talk to you. You need to contact them at least once each pay period. If you can, find an individual advisor at the credit company whom you can contact every time. However, this is difficult to do; I'm not sure why.

Talk to a human being whenever possible. I hate voice-automated systems for many reasons. Sometimes it's convenient, such as when you can make a full payment. But if you need to pay an amount BELOW the minimum, take the time to wander through the phone trees, even if it takes more than an hour, until you find a real human being in the telephonic forest. You can congratulate yourself that your persistence is helping another American to keep their job! [Incidentally, Verizon is the WORST about voice-automated systems. Their commercials, with all those people following a customer around, are totally misleading. In Reality Land, it is very very difficult to find a real human being among Verizon's phone trees. Verizon's computerized voice is a total control freak. I hate talking to her, and most of the time I don't ... I just remain silent and passive until a real person comes to my rescue. They have to do this for their elderly customers who are bewildered by the phone trees, but I take advantage of it too. Sorry, I'm ranting.]

The creditor's first option is NOT your only option. Let's say you have an account with Citi Cards. It has a $3,000 limit, which you're way over (probably in large part due to interest and fees). Your credit card statement says that your minimum payment is $800. The account is 75 days past due. You're getting daily calls (which you let go to voice mail; thank God for caller ID). Guido's Collection Agency is sending threatening letters. Your credit score is sinking faster than the Titanic. You could pay PART of the $800 ... if you don't mind not feeding your children for the next two weeks. Okay, so here's the thing. Take a deep calming breath. Remember that Citibank (or whomever) is desperate for money ... ANY money will do. They want to rescue your debt and show that you are paying on it, so they can justify keeping the debt on their assets page. The $800 minimum payment is what they would LIKE to get out of you, but consider it as merely the starting point in your negotiations. Decide what you can afford, and stick to it. Believe me, they'll take it.

Timing is everything. What the credit companies are looking for is MONTHLY INCOME, same as you and me. They would love to be able to count on a guaranteed $800/mo (or whatever) from you, because THEY NEED TO PAY THEIR BILLS TOO. If your credit card bill is due on the 15th of the month, it really really behooves you to make that payment by the 15th. If you can't make the minimum, call the credit company and arrange to pay less than the minimum. In most cases, they will be willing to work with you. Just like you and me, they need to pay the people they owe (Target, Outback, TJ Max), keep the electricity running, pay the finance company for all those servers they bought last year, and pay the people who answer the phones. So just like you and me, they are looking for a certain amount that they can COUNT ON every month. If they don't get paid on time, they freak out. Which makes sense ... if your job doesn't pay you on time, or if they don't pay you enough, you freak out too, right?

It's up to YOU to avoid late fees. Pay something -- ANYTHING -- on time to avoid late fees. If you have four credit cards that you pay late every month, and each charges you a $39 late fee, you are paying (or racking up) an unnecessary $156/mo. If you stop accruing late fees, you might even be able to afford your car payment. If you're paying at the last minute, call the creditor, find a real human being among the phone trees, and ask if the late fees can be waived or removed. In some cases, they will be able to do this for you. Remember, the creditor's main concern is being able to count on a monthly income from you. Fair's fair, right?

My credit rating's in the gutter. If you can't afford the debt you have now, why does this matter? <sigh> All right, fine, I'll dish on this too. When you talk to the credit card people, you can negotiate to have your credit rating improved. Yes, you can. For example, we negotiated with one of our creditors to have our account brought up to "current" if we paid $194/mo for three months running. They will even wipe out the past adverse reports to the credit bureaus, which I think is darn nice of them. We've kept our end of the bargain ... timely payments in the agreed-upon amount. Like Earl has discovered, if we do nice things for our creditors, they will do nice things for us. It's like financial karma.

Creditors can smell fear. If you're not answering your phone, checking your mail, or (worst of all) not paying them, the creditors will get nervous and you will find yourself in the middle of a financial feeding frenzy. Creditors respond to fear the same way that sharks respond to the scent of blood in the water --they want to get in and get the biggest chunk out of you that they can before the other sharks rip you to pieces. Hence the daily calls (they're hoping one of your kids will mess up and not check the caller ID), the evil letters from Guido's Collection Agency, and the heartless attempts at extortion on the part of most of their employees when you call on the phone. Don't be afraid, and do the very best you can to feed the sharks on time every single month, even if it's just a little bit. They may not go away completely satisfied, but they'll at least leave you alone for another month.

Be polite, be friendly, be humble, be human. There are lots of cliches. Do unto others as you would have others do unto you. You catch more flies with honey. Whatever. Basically, don't be afraid of your creditors but don't be a jerk either, even if the person on the other end of the phone is being a total jerk to you. Remember the person on the other end of the phone (the representative/employee of the credit card company) also has a mortgage and car loan that they're probably worrying about paying ... and probably they're hoping for a big fat commission check by collecting from YOU so they can pay their own bills. Think about Earl's karma. Do something nice for them (like PAYING them), and they'll probably be more willing to do something nice for you (like reducing your payment or working out a plan).

Follow through. This is probably the most critical and the most difficult step of all, especially during a money crunch. IF YOU AGREE TO PAY $100 FOR THREE MONTHS, THEN BY GOLLY PAY $100 FOR THREE MONTHS. I know it sounds obvious, but you'd be surprised how easy it is to forget this step. You start out terrified, you make the call, you deal with a difficult employee, you negotiate an agreement, and you hang up, limp with relief and with rivers of flop sweat under your arms. But remember, IT IS NOT OVER YET!!!! You have swum to the surface, you can now breathe, but YOU HAVE TO KEEP GOING. Every single month. If you can't make your full payment next month, call and negotiate again if you have to. Until your debt is paid off in full, YOU ARE NOT DONE. Keep going, keep calling, keep paying, and stay timely.

As you can most likely infer, we have learned these lessons the hard way. But last weekend we were able to celebrate having ALL of our accounts CURRENT. It's a significant step. I don't know what's going to happen next month, but we'll tackle it when it comes.

Was this advice helpful to you? Be sure to click the Thumbs Up button below, and feel free to post a comment. Thanks! --D.A.