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[N131]Negotiate With Credit Card Companies

by Charles Essmeier, Cha

The average American household has nearly $10,000 in credit card debt, and many people are only able to make the minimum payment of 2% of the balance. Even 2% is $200, and by paying the minimum payment, you could be paying on the balance for decades before you finally pay it off. Since new legislation will make it more difficult to file for bankruptcy, it may occur to savvy debtors to try to negotiate a better deal with their credit card company in order to make it easier to pay off the balance. Is this possible?

It might be possible, depending on your credit history, interest rate, and current balance. Your best bet, especially if you have a history of paying on time, is to simply call your credit card company and ask if they will lower your interest rate. They might, especially if you tell them that you got a better offer from another bank. If you have a history of paying late, however, they probably will not be willing to lower your interest rate. That's unfortunate, since paying late has probably prompted the credit card company to raise your interest rate in the first place. Still, it's worth a phone call; you may get lucky.

If you've been paying your bills on time, asking for a lower interest rate may be the only option available to you. The credit card companies aren't going to be too sympathetic to your financial woes if they're receiving payment on time. On the other hand, if you're late on your payments, especially if you're more than three months behind, you may have some negotiating leverage. That leverage comes with a few strings attached, however. You may be able to negotiate a lump-sum settlement for your outstanding balance, where the credit card company accepts a portion of your debt and writes off the rest. They're often willing to do this instead of turning your debt over to a collection agency, as it's cheaper just to settle. The settlement amount will vary, depending on your interest rate, your balance and your payment history. This type of settlement comes with a couple of problems of its own, though. What if you don't have the money to settle all at once? If you can't pay your bills on time, you probably don't have the cash to settle at once. Additionally, the amount of your debt that gets written off will show up on your credit report as bad debt, and that will stay there for seven years.

Your credit card company may or may not be willing to work out a payment plan, but it costs you nothing to ask them, and negotiating a settlement with them may be cheaper for you than if you consult with a debt consolidation firm. If your credit card debt is substantial and you just can't make the payments, it's worth a try.

Credit card holders may be having a hard time keeping up with the constantly changing rules within the industry. Strategies that have long be considered fool proof when managing your credit card account are now no longer a sure thing. Many consumers who previously were able to keep their account in good standing are finding it harder to meet their financial obligations due to the current economy. To add to their struggle, the credit card companies have implemented aggressive tactics in their attempt to lessen their losses. Some of the actions taken by card issuers include, arbitrarily raising interest rates, slashing credit limits and imposing fees for the slightest transgression.

Card holders unhappy with these actions have fewer options to remedy the situation than they had in previous years, however there are still some card issuers who are willing to work with customers to maintain a mutually beneficial relationship. Consider the following tips to negotiate better terms with your credit card issuer.

Let Your Voice Be Heard- The credit card companies know that recent changes to customer accounts have created unhappy card holders. Card holders who grumble to their spouse, co-workers or neighbors are not going to see changes on their account just because they consider the changes unfair. For this reason you must contact your credit card company to let them know you are not satisfied with the changes on your account and would like certain charges waived or interest rates adjusted. That being said, do not expect to make one call and have a customer service representative graciously agree to your request. You will have to be persistent and most likely talk to several representatives until you reach a person who has the authority to make changes.

Do Your Research- Experienced negotiators understand the value of knowing what you are talking about when attempting to negotiate a deal. Before contacting your creditor research current credit card offers to see what is standard in the industry right now. This information will help you find a middle ground with your credit card issuer. You will have a better chance of success in negotiations if you have a specific and somewhat realistic request. Negotiations require some flexibility, so you should have a few back up requests to increase the likelihood of getting better terms. If you are looking for a lower interest rate and the credit card issuer is not willing to bend, you could ask to have your annual fee waived or an increase in your available credit. If you are not willing to accept less than what you are asking, do not threaten to take your business elsewhere unless that is a viable option. You may be disappointed to discover finding a balance transfer credit card (especially one with better terms) in the current economic climate is much harder than in years past.

Use Your History As Leverage- This is assuming of course that your history is good. If you have managed your account well in the past you are in a better position to negotiate lower interest rates or have certain fees removed. Card issuers are currently dealing with an increasing number of consumers who are unable to make their payments so they should be interested in keeping valued customers happy. Before contacting your credit card issuer you should be prepared for the very real possibility that your request will be denied. Avoid taking your frustration out on the representative as angry outbursts or threats will not get you better results.

Article Source : Credit Card Companies

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Both Charles Essmeier & Elizabeth Williams are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Charles Essmeier has sinced written about articles on various topics from Free Credit Report Score, Mortgage and Cars. (c)Copyright 2006 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to. Charles Essmeier's top article generates over 49500 views. to your Favourites.

Elizabeth Williams has sinced written about articles on various topics from Finances, Credit Cards and Advertising Guide. Elizabeth Williams, Editor-in-Chief for CreditCardFlyers.com Need to transfer higher interest credit to a lower interest to save money? CreditCardFlyers.. Elizabeth Williams's top article generates over 60500 views. to your Favourites.