Credit industry experts said customers’ purchasing habits are dramatically different than just a decade ago as customers trend away from using cash.
In turn, many consumers have complained about the high interest rates that credit card companies charge, and now, some businesses that accept credit cards said the rates they pay to accept cards are unfair.
“People were still using cash more often — using cash or checks for smaller purchases, like under $5 — and, now, we don’t think anything of using our card
Merchants must pay a fee every time someone swipes a card, which can have an impact on the businesses’ bottom line. small businesses feel it most and have the least ability to do anything about it.
“Small businesses don’t have a lot of leverage, or are (not) in a position to push back on these companies fmf oil is one of those small businesses. Company president john davis said he is not at all happy about the credit card processing fees his company has to pay with every transaction — both a percentage and fixed fees. “They’re actually making more money on a gallon of gas than we are,” davis said. Davis has circulated petitions at his convenience stores throughout the state as part of a larger effort by a retail industry group to support congressional action that would increase the transparency of the fee structures and give retailers more power to negotiate. “They write the rules, you either take it or leave it and our customers demand we take it,” davis said.
The credit card industry sees it differently, responding to an inquiry by issued in a statement: “Retailers today receive tremendous benefits from accepting electronic payments, including guaranteed payment, the potential for increased sales, faster checkout times, as well as greater convenience and security — all at a fair price. The petition drive is part of longstanding and failed attempts by retailers and their trade associations, who are no longer content with paying their fair share, to pad their profits by shifting their normal cost of business onto consumers.”
The petition drive that at FMF oil locations around the state continues until Wednesday, after which time the signatures will go to a national trade group that will forward them to Congress
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Burt & Associates was featured in the Dallas Morning News article written by Pamela Yip.
Below is a reprint of this article:
Persistence is key to getting credit card rate cut
12:00 AM CST on Monday, January 19, 2009
Pamela Yip, Dallas Morning News
Each time I’ve advised consumers to negotiate with their credit card company for better terms, I’ve received e-mails from readers saying they had doors slammed in their faces whenever they tried.So I decided to ask someone who deals with creditors what approach is most likely to work.
Jerry Curtis is chief executive of Burt & Associates in Plano, a debt collection agency firm
“The main problem that most people have is that they won’t be persistent,” he said. First, deal with the customer service representative who answers your call.”Call about three days before the end of the month,” Curtis said. “That’s when there’s a lot of pressure on the customer service team to meet goals for the month.”
If you aren’t successful with the first representative, call back because you may get a different person who may be more willing to work with you.If you still strike out, ask to talk to the person’s supervisor, but be courteous. Be prepared to wait on the line if you ask for a supervisor. “No. 1, they’re hoping you’ll hang up. No. 2, the supervisor is talking with someone else,” Curtis said. “The odds are 75 percent in your favor if you get the supervisor on the phone that he will get that [interest] rate cut. The one word they don’t want to hear is ‘bankruptcy.’ “It’s important that you get the interest rate on your balance cut; otherwise, it will take you forever to get out of debt. “Otherwise, it all goes to interest,” Curtis said.
If the supervisor refuses to cut your rate, ask that your rate be lowered for six months to get you through a tough time and say that you can readjust after that.
Know what the going interest rates are on credit cards and ask for something within that range. Web sites such as www.creditcards.com and www.lowcards.com will give you an idea.
“Look at your credit card statements and call the card with the highest rate first,” Curtis said. “Explain that you’ve been a good customer and really like their company and want to continue using them, but times are toug! h and yo u’re having to make some tough choices and would like them to lower your rate so that you don’t have to transfer your account to another company.”
It’s worth trying Curtis’ suggestions. Anything is better than just sitting there and taking what the credit card companies dish out. You’ll have much better leverage if you’ve paid your bills on time and haven’t abused your credit line. Things aren’t going to get better for cardholders anytime soon.
Issuers, trying to cut risk and to get more money from consumers, are cutting credit lines and raising interest rates.Sweeping new rules aimed at banning controversial credit card practices don’t take effect until July 2010.
The rules eliminate or dramatically restrict a number of practices, including “double-cycle billing” and interest rate increases on existing balances. The rules also require better disclosure of account terms.”These new regulations are unprecedented in scope and address concerns raised by consumers and policymakers,” Edward L. Yingling, chief executive of the American Bankers Association, said in a prepared statement. “In effect, these new regulations completely rework the current credit card system and mark the beginning of a new market structure for credit cards.”
But until those rules take effect, you can bet that card issuers will be taking full advantage of what they can get away with. Don’t let them do that without a fight, and don’t give them a reason to come after you. Keep your credit use low in relation to your available credit, pay more than the minimum payment and pay on time. Allocate all extra money to paying down your debt and start getting used to using cash. That will take care of trying to negotiate with your credit card company.
As always, Burt & Associates is here to serve our clients. We are an SAS-70 Type II certified commercial collection agency. Please call us today to get your accounts receivable managed and collected.
Regards,
Jerry Curtis
President & CEO
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Educational Tidbits For Today’s Credit Executive
Collecting on Court Judgments
Even after your company wins a judgment from the court, in many cases the hard part might just be starting. Particularly when the judgment is against a financially healthy debtor, collection may be relatively easy since the debtor wants to end the matter and get the judgment out of its hair. Things may be different, however, when a debtor has weaker finances. In any case, judgments are generally good for ten years and it may take some patience to collect on a judgment. Although it may not be good strategy to start bugging a debtor to pay up immediately, it is important to ask for the money and issue reminders. Written requests are useful, and if things drag out it may be helpful to remind the debtor that further legal action could be taken to force payment of the judgment.
The Credit Manager’s Q&A Corner
QUESTION: Explain what a liquidating reorganization is.
ANSWER: A “liquidating reorganization” is an informal term for a Chapter 11 proceeding when the company is essentially liquidated through one or more asset sales.
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