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Negotiate Citibank Debt

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Mark Cappel
UpdatedJun 20, 2024
Key Takeaways:
  • Settling with creditors is an effective, aggressive debt resolution strategy.
  • Citibank has the reputation for a sharp negotiation policy.
  • Consider hiring a debt settlement company to negotiate.

I am negotiating a settlement to a credit card debt with Citibank. What will Citibank accept?

We have a Citibank card with a balance of $23,000 at 16% interest. The account was closed a few months ago and we have been paying $600 per month. What are the chances of Citibank taking a settlement offer of $9,000? We have had this card for many years and I know that at least 50% if not more of the balance is all interest.

I will provide negotiating strategies and debt settlement solutions that will help in dealing with Citibank. You do not mention whether the $600 is covering the minimum payment. Because you continue making payments, the creditor will assume you have the financial ability to pay for the debt. You do not mention any other debt, your income, or your credit score.

I see the following issues in your question:

  1. Debt settlement
  2. Settlement amount and payment
  3. Negotiating tactics
  4. Your credit score
  5. Alternatives to settlement


Settling with creditors can be an excellent way to resolve outstanding debt. Unfortunately, it can also be a complicated and sometimes difficult process involving multiple rounds of negotiations, strict due dates, and of course, the need to raise the money to actually pay the settlement.

As far as the funding of the settlement, you should certainly try to raise the necessary funds as soon as possible to be prepared if Citibank decides to accept your offer. Many creditors request payment within a relatively short time frame once a settlement is agreed upon. However, I would still continue to communicate with Citibank as long as you think that you can raise the funds needed to pay the settlement, if accepted, within a couple of months. In some cases, creditors will allow 30 to 60 days or more to finalize the payment of a settlement amount, as long as a significant portion of the settlement can be paid soon after the agreement is finalized.

However, you probably should not call Citibank and make offers that you cannot realistically afford to pay. If Citibank accepts an offer and you are unable to pay the settlement, it could damage you ability to negotiate with them in the future.

Settlement amount and payment

Each creditor has its own policies for settlement amounts. The rule of thumb for debt-settlement with all creditors is 50 cents on the dollar. Citibank, however, has the reputation for having a policy of sharp negotiations. Consequently, pros I have spoken to use 60 cents on the dollar as the rule for Citibank credit card debt.

You are contemplating an offer of $9,000 for a $23,000 debt, which is approximately 39 cents on the dollar. That is a good starting point, and an offer Citibank may accept. You must be realistic in your expectations in light of Citibank's reputation. This reader negotiated an excellent settlement with a Citibank collection agent.


Review the resource Negotiating Debt to learn more about tactics and techniques for dealing with either original creditors (in this case it is Citibank) or collection agents.

It is wise to insist the creditor put the terms and conditions of the settlement in writing. I caution readers to not give collection agents account numbers and authorization to transfer funds directly from the consumer's account. I have received messages from consumers who have given this information to collection agents, and either through incompetence or malevolence have deducted more from the readers' accounts than the amount agreed upon.

That is not to suggest that Citibank is unscrupulous. Indeed, original creditors have an ongoing relationship with customers and usually care about their reputations. Therefore, it is usually safe to allow an original creditor to have access to your accounts. However, if you are dealing with a collection agent, the reverse is true. A wire transfer offers no benefits to the consumer and exposes them to risk unnecessarily. Therefore, the safest course of action is to pay collection agents by money order or a paper check.

If you cannot reach an acceptable settlement amount, or if you do not have a lump-sum available to pay a settlement immediately, consider hiring a debt settlement company to do the heavy lifting for you. For a no-cost quote from a pre-screened service provider, visit the debt saving center.

Credit score

If you have been late on your payments or not paying the full amount of the minimum payment, the creditor has probably noted that on your credit report. has numerous articles on credit scores from credit score basics to what a FICO score is.

Alternatives to settlement

The four primary concerns for most consumers are: i) monthly payment, ii) time to debt freedom, iii) total cost, and iv) the credit rating impact of the resolution program. Be sure to evaluate each program relative to your prioritization of these factors.

Since there are a variety of debt resolution options, including credit counseling, debt negotiation/debt settlement, a debt consolidation loan, bankruptcy, and other debt resolution options, it is important to fully understand each option and then pick the solution that is right for you.

Credit counseling

Credit counseling, or signing up for a debt management plan, is a very common form of debt consolidation. There are many companies offering credit counseling, which is essentially a way to make one payment directly to the credit counseling agency, which then distributes that payment to your creditors. Most times, a credit counseling agency will be able to lower your monthly payments by getting interest rate concessions from your lenders or creditors.

It is important to understand that in a credit counseling program, you are still repaying 100% of your debts -- but with lower monthly payments. On average, most credit counseling programs take around five years. While most credit counseling programs do not impact your FICO score, being enrolled in a credit counseling debt management plan does show up on your credit report, and, unfortunately, many lenders look at enrollment in credit counseling akin to filing for Chapter 13 Bankruptcy -- or using a third party to re-organize your debts.

Debt settlement

Debt settlement, also called debt negotiation, is a form of debt consolidation that cuts your total debt, sometimes over 50%, with lower monthly payments. Debt settlement programs typically run around three years. It is important to keep in mind, however, that during the life of your debt settlement program, you are not paying your creditors. This means that a debt settlement solution of debt consolidation will negatively impact your credit rating. Your credit rating will not be good, at a minimum, for the term of your debt settlement program. However, debt settlement is usually the fastest and cheapest way to debt freedom, with a low monthly payment, while avoiding Chapter 7 Bankruptcy. The trade-off here is a negative credit rating versus saving money.

Debt consolidation loan

Many people think first of a debt consolidation loan when seeking debt consolidation. This option typically means a second home loan (or home equity line of credit) or refinancing your primary mortgage. In a debt consolidation loan, you exchange one loan for another. The most frequent form is taking out a mortgage loan, which carries a lower interest rate and is tax deductible, to pay off high interest rate credit card debt.

It is important to be aware that shifting unsecured debt to secured debt can create a volatile situation, if there is ever a chance that you cannot afford the new mortgage payment you are now putting yourself at risk of foreclosure! In the case of a debt consolidation loan, most mortgages are 30-year loan, which means that the total cost and the time to debt freedom could be very high, but the monthly payment will be lower than other options and there is no credit rating impact.


Bankruptcy may also solve your debt problems. A Chapter 7 bankruptcy is a traditional liquidation of assets and liabilities, and is usually considered a last resort. Since bankruptcy reform went into effect, it is much harder to file for bankruptcy. If you are considering bankruptcy, I encourage you to consult with a qualified bankruptcy attorney in your area.


You may be curious what may happen if you do nothing. If you stop paying your unsecured debts, creditors have the right to collect the debt. First, you will likely receive collection calls and letters from the creditor directly. If you are still unable to pay the debt after several months, the creditor is likely to refer the account to a third-party collection agency.

Third-party collectors are known to be much more aggressive in their collection tactics than original creditors, so do not be surprised if the calls become more persistent, or even threatening. Thankfully, the Fair Debt Collections Practices Act has rules governing the behavior of collection agents. However, unscrupulous debt collection agents do not follow these rules.

In some cases, when all other collection efforts fail, a creditor will decide to file a lawsuit against the debtor. This is not a frequent occurrence, but it is within a creditor's rights and a possibility about which you should be aware. If one of your creditors sues you, the court will likely issue a judgment in the creditor's favor. Depending on your state's laws regarding the enforcement of judgments, the creditor may be able to garnish your wages, levy your bank accounts, place a lien on your property, or take other action to enforce its judgment.

Regarding a credit report, default damages a credit score severely. In addition, default is a warning flag for many lenders, who will refuse to deal with a potential customer with a default on their record. As a result doing nothing and allowing default is a poor option for most consumers.


Although there are many forms of debt consolidation, many people with good to perfect credit who own homes should look into debt consolidation loans, while consumers with high credit card debt and poor credit may want to explore debt settlement or debt negotiation. However, each consumer is different, so find the debt consolidation option that fits for you.

Lastly, here are some fast tips for your own quick Debt Consolidation Evaluator:

  1. If you have perfect credit and have equity in your home -- consider a Mortgage Refinance.
  2. If you can afford a healthy monthly payment (about 3 percent of your total debt each month) and you want to protect yourself from collection and from going delinquent -- consider Credit Counseling.
  3. If you want the lowest monthly payment and want to get debt free for a low cost and short amount of time, AND you are willing to deal with adverse credit impacts and collections -- then evaluate Debt Settlement.
  4. If you cannot afford anything in a monthly payment (less than 1.5 percent of your total debt each month) -- consider Bankruptcy to see if Chapter 7 might be right for you. makes it easy for you to apply for traditional forms of debt relief.


Citibank has a reputation for being a sharp negotiator regarding credit card debt. If you are negotiating with Citibank directly and the negotiations are not satisfying, you may wish to wait until Citibank sells your collection account to collection agent that is more flexible.

Another option is hiring a debt resolution company. Negotiating debt is difficult and scary for many people, but it can be done. If you do not succeed on your own, hire a professional to do it for you. You can get help for your debt. See the debt resolution savings center to get no-cost quotes from pre-screened debt resolution firms. Learn about additional ways to get out of debt with the no-cost debt help services guide.

It appears you have $9,000 to pay the debt. The more funds you have available to negotiate with the better your position you will be. This is true whether you do the negotiations yourself or hire a professional.

Additional resources

I have answered other reader questions regarding Citi credit card accounts. See Renegotiate Citi Credit Card Settlement Agreement to understand your options if you have a settlement agreement with Citi you can no longer afford; Citibank Hardship Program for tips on how to enter Citibank's credit card hardship program; Citibank Settlement for ideas on how to negotiate with a collection agency that owns a Citibank collection account; and Settlement on a Citibank Credit Card to learn how Citibank's internal debt settlement goals vary from time to time.

I hope this information helps you Find. Learn & Save.



Debt statistics

Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q1 2024 was $17.69 trillion. Auto loan debt was $1.62 trillion and credit card was $1.12 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

The amount of debt and debt in collections vary by state. For example, in Wyoming, 24% have any kind of debt in collections and the median debt in collections is $2680. Medical debt is common and 17% have that in collections. The median medical debt in collections is $1515.

Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.



AAndrew, Apr, 2012
I have a debt with citi card but I have been making regular payments (little more than minimum) every month on time... But now, it has become very difficult for me to make the payment, since I have my wife who is not working. I want to join their hardship program, but the thing that concerns me is how bad is it going to hit my credit score and for how long? I have never delayed in making payments to any credit so far. Thanks,A
BBill, Apr, 2012
Great question! Citi needs to answer your question. I suspect the answer varies based on the circumstances and if the customer completes the program. Ask Citi: • If accounts in its hardship program are closed. • What status Citi reports on the account during the hardship program. • What status Citi reports on the account when a customer completes it successfully.

Please return here and share what you learn.

JJoe, Oct, 2013
I have similar situation. I have kept my Citi cards for 8 years in good condition (never missed a payment) but now i'm really suffering since expenses went up, trying to survive day by day. My question is, what is the best way to convince Citi about my situation? In other words: I need a hardship plan that works.
BBill, Oct, 2013
Call Citi and offer to send the customer service representative in the hardship department a copy of your household budget that shows why you need relief on your payments. Perhaps your income has dropped due to your hours being cut at work, or maybe a family member is ill and requires expensive medical treatment your health insurance does not cover, or something else that is beyond your control. If you can document the hardship, your chances of Citi giving you the relief you seek are high.

If Citi denies your request, use the Debt Coach tool to learn your other options.
AAnn, Feb, 2014
Good luck negotiating with Citi. I attempted to negotiate with them back in 2010 trying to reduce my minimum monthly payment. They flat out neglected, failed and refused to negotiate leaving me with no choice but to default. Prior to that I had always had excellent credit. Four years later they are now trying to negotiate with me after they destroyed my credit. Their actions are definitely unethical and should be illegal.