Dear Sir / Madam RE: Account Number 1234 5678 8765 4321 I am writing in regard to the outstanding debt relating to the above account. Unfortunately, my circumstances have changed over recent months, and I find I am going to be unable to meet my credit card repayments for the foreseeable future. Instead, I propose to repay the balance at a rate of £20 per month, and I hope that in approximately 6 months I will be in a position to increase that figure so that I can attempt to pay the balance off more quickly. It will help a great deal if you will freeze the interest so that the debt does not increase, and I can be in a position to make actual reductions, however small, to the amount owed. I hope this is acceptable to you and I want to confirm I intend paying off this debt in full. Should my circumstances improve, I will contact you again with a view to increasing the payments I make to you. Please find enclosed a copy of my current financial statement, which summarises my total income and current outgoings. I also enclose the credit card, as I no longer use the facility. I look forward to hearing from you. Yours faithfully, Fred Blogs

It is important never agree a repayment schedule with the company that leaves interest accumulating. There is no point in making payments of £25 per month, with an interest of £20 going back onto the balance.

Credit card companies know that unsecured loans are difficult to recover and will usually try help you out. However, some companies may telephone you in the evening or at weekends and try to persuade you into agreeing more. Don't be pressurised though, as if you agree a repayment figure higher than your original offer, and can't keep up the payment, it will work against you in the future. These calls are always recorded, so just politely confirm that the position detailed on your financial statement hasn't changed and ask them to respond to the letter you sent in writing, not by telephone. After that, if they continue to try to contact you by telephone it could he regarded as harassment.

An important point to note is that credit card debt is an unsecured debt. The credit card company may try and persuade you to turn it into a secured loan in return for a very low repayment - you should refuse this if at all possible. If the debt is unsecured, you hold the advantage, not the credit card company. They cannot force any repayment if you do not have the money to make a repayment with.

Make sure you stand firm and get them to agree to a small monthly repayment schedule. This will give you the opportunity of going back to the credit card company in a year or so and telling them you want to make a small one off payment to clear the debt altogether. Many companies will accept a one off payment of considerably lower than the full balance, rather than continue having the larger debt being paid off at an interest free rate £10 per month for 20 years. However, if you have secured the loan against your property, you won't be able to make such an offer, and clear the debt completely.

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