Negotiating with Your Creditors
A lot of credit cardholders are finding out that their interest rates or minimum monthly payments are going up or their available credit is going down.
It’s scary and frustrating when that happens. If you’re one of these cardholders, you’re probably wondering what you can do about it. Fortunately, the National Foundation for Credit Counseling, the nation’s largest nonprofit credit counseling organization, has some tips, which I’d like to share with you:
Ask for an explanation. The card issuer may be doing it because of account inactivity, because you’ve become too risky, because you’re no longer profitable. Either way, you deserve to know why the terms of your agreement are being altered.
Try to get your previous terms restored. If you’ve been in good standing, you should call the card company and plead your case. But remember, “in good standing” is the operative phrase here.
Build your case. Arm yourself with information about how long you’ve been a customer, how much you charge each month, how good a payment history you have. Have all the answers to the questions they will ask before you make the call.
Prove that you’re desirable. Get your credit report for free from www.annualcreditreport.com, then review it for accuracy. Find out what your FICO credit score is, which most lenders use to determine how credit-worthy you are. Again, arm yourself with information.
Prove that you can pay. If it’s true, point out that you have a steady job and a steady income.
Be prepared to negotiate. Decide what you’re willing to accept before you call. If, for example, the card company has both raised your rate and lowered your limit, decide if getting a lower rate or a higher limit is more important. If you carry a balance, the lower rate is probably the way to go.
Ask for a supervisor. If the customer representative is not being cooperative, ask to speak to a higher-up until you get what you want or are convinced that the company won’t budge.
Ask about the opt-out clause. If your rate has been increased to an unmanageable level, ask if you can close down the account and pay the balance off under the original rate. This might affect your credit score but it might still be the best option.
Ultimately, you might not get what you want, but it’s worth trying out these tips.
Posted by: MzFitz | August 4, 2009 11:15 AM | Report abuse
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