Negotiate a lower rate with your credit card company

Haggling With Your Credit Card Company

Haggling With Credit Card Company

What specific points would you suggest that we consider when haggling with a credit card company? I have a credit card that I'd like to get the payments down on until some of this economy situation clears up. I've lost 60% of my retirement and don't have time to rebuild, so I need to do some thoughtful trimming. I'm interested in your thoughts on this, as I'm not able to find too much on the Internet regarding this type of haggling.
Joyce P.

Learn to Haggle with Card Company

I found Scott Bilker's book, Talk Your Way Out of Credit Card Debt!, to be incredibly helpful. It's not in most libraries, but you can get it sent to you via Inter-Library Loan. (Ask your librarian.) It contains tips on how and what to ask for and what to do if you're initially refused. What I found most helpful is that he transcribed his actual calls to the bank, so you can read exactly what they're likely to tell you.

Debt Free Better Than Haggling

This is an interesting question because I don't think this person is really seeing the big picture. Debt is not something that you "trim down" because the economy is bad or your stock portfolio isn't doing so hot. Debt is a huge personal drain that prevents you from building wealth in any economy. Seriously, is the plan here to run the credit cards back up when the economy is better? Unfortunately, that's the way this question reads to me.

As for any specific haggling points, remember that you are dealing with large, faceless corporations. They don't really care if you leave or not and they recognize that you are over a barrel. You're best bet is to get another legitimate offer for a balance transfer and then call and see if your current company will match it. My absolute best advice, however, would be to commit to a debt free lifestyle and then you won't have to haggle with any credit card company ever again.

Financial Planner Tips for Haggling

For the person who asked for tips on how to haggle with credit card companies, here are some tips that I've found very helpful while helping my clients:

  • Before calling the company, research your history with that credit card issuer. Have you made all (or most) of your payments on time? Have you been a long-time customer? These things will be in your favor.
  • Be honest and tell them that you've had a setback (job loss, illness, etc.) and ask for their help. You'll probably have to ask for a supervisor.
  • If you have a specific amount in mind to pay, ask for that. You can change the due date of your payment with most companies to coincide with your paychecks. I've always tried to knock down the interest rate, and even 1% can make a difference.
  • Send any extra money you can to them (even if it's not with your regular payment). That money will reduce your debt and therefore reduce the interest.

Carole in Granby, CT, retired financial planner

Plan for Dealing With Credit Card Company

Try putting together a budget showing your income and then your expenses for everything other than debt repayment. List only necessary expenses, but keep them realistic. Then take the amount you have left over for debt repayment and (on paper) split it between the different debts in proportion to the amount you owe.

If you then approach a credit card company (or any creditor) with this budget and ask to reduce your payments to this proportionate amount, you stand a much better chance of getting approval than if you just haggle as if you were at a store. You can also request to have interest frozen while you are making these lower payments.

Bear in mind, this will only be a temporary offer from the credit card firm and you will likely have to show a plan (and preferably a time scale) for returning to your normal level of payments.

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