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Burt and Associates is a Collection Agency that specializes in Commercial Collections.

Print - The Dallas Morning News

Persistence is key to getting credit card rate cut.

by Pamela Yip

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 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 tough and you'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.