Content Overview
- Summary
- Contact The Credit Card Company Ahead Of Time If You Have To Miss A Payment
- Ask For A Waiver of Fees
- Ask For A Lower Rate Of Interest
- Pay Down The High Interest Rate Credit Cards First
- Transfer Balances To A New Account Or To An Account With A Lower Interest
- Consolidate Your Credit Card Debt Into Non-Credit Card Debt
How To Manage Credit Card Costs
Ask For A Lower Rate Of Interest
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Consider calling each of your credit card companies to ask for a lower rate of interest. You can do this with the company's "regular" rate -- and particularly if your rate is raised because of a late payment or other reason.
Before you call think about everything you can use that will help you get a lower rate. Decide which are best arguments, and in which order to use them. Basically you are building an argument why it is in the company's interest to change your rate of interest.
Factors to consider are:
- Telling the company about your health condition could be helpful in the negotiation. It may seem like a credit card company is a large, non-caring corporate entity. In reality, you're talking with people who may be sympathetic to your situation.
- What caused the financial crunch? Was it something unexpected and beyond your control such as medical bills?
- How long you've been with the company. (The longer the better.)
- Your history with the company. For example, the average amount you've charged each month, and your history of paying on time. (Credit card companies want to keep people who give them a lot of business -- particularly people who pay a lot of interest.)
- The credit card offers you (or your friends) have been getting in the mail. What rate of interest have those cards offered? How do those compare to the rate you're paying? (It would help to gather current credit card statements and any pre-approved applications so you can quote the rates precisely.)
- If the rate were low enough, would you be willing to transfer a balance from another account to the one in question?
- Keep in mind:
- The company is making money off of you. You're in the driver's seat.
- A creditor would rather work with you than end up with a vastly reduced sum if you go into bankruptcy.
- You can threaten to stop using the card entirely.
When you're ready, call each card company. The phone number is on your card or on the application. Let the person know you are calling to obtain a reduction in the rate you pay on your credit card. Is the person authorized to make a change? If not, ask to speak with a person who can authorize a reduction -- generally a supervisor.
Expect arguments like "our rate is fixed." Be persistent but firm until you get a yes. The card company (especially if you already have the card) won't want to lose you. Key questions are:
- "What can you do better for me" and
- "Is there a different card you can offer me with a better rate"?
If the representative you speak with balks at lowering your rate, ask to speak with his or her supervisor.
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