Highlands Today
Email
Print
Lower Your Own Credit Card Interest
ADVERTISEMENT
Published: November 10, 2008
A month ago, Marti Ann Mammarelli looked at the interest rate on her credit card from Wachovia. It was 9.9 percent.
"That's not bad," she thought. "The days of 5.9 are over."
Still, she was getting 7.9 percent on another card. So Wachovia's interest rate could be lower.
Mammarelli did exactly the right thing. She found the phone number, called, and simply asked for a lower interest rate.
"She said, 'let me check with my supervisor,'" said Mammarelli, who lives in Tanglewood, a senior mobile home park between Sebring and Avon Park.
The customer service representative came back and negotiated for the 18,000 reward points the Mammarellis had built up over the years.
"That's fine," she said. She wasn't really sure what the points meant anyway, and the Mammarellis never used airline miles to fly.
National Picture
Americans owe $900 billion on their credit cards, according to Federal Reserve figures. Five big financial companies - Discover, Bank of America, Citigroup, JPMorgan Chase and Capital One - issue 80 percent of all U.S. credit cards.
And that could be the next whopping financial crisis. According to an Oct. 29 Business Week report, even consumers with strong credit records are defaulting on their cards. Banks are bleeding tens of billions of dollars in red ink.
That's why, on Oct. 29, the Financial Services Roundtable and the Consumer Federation of America asked U.S. Comptroller of the Currency John Dugan for a pilot program to allow lenders to forgive as much as 40 percent of the credit card debt owed by consumers. The debt to be forgiven would be determined case by case; those at the maximum level would be near filing for bankruptcy.
So far this year, 880,076 bankruptcies have been filed, already exceeding the 2007 total of 822,590, the American Bankruptcy Institute reported.
Change We Need
"I think we are going to see some major changes," David Jones, president of theAssociation of Independent Consumer Credit Counseling Agencies, told CreditCard.com."There may very well be a credit card bill of rights. This may be the only time that it will be possible to pull that off. With public opinion and the mood of Congress and the desire for change in the American people, I think now is the time to do that."
For years, credit cards were cheap and easy. Through low interest offers, banks begged customers to run up balances. Then, two years ago, gasoline and food got so expensive, people weren't just charging furniture or vacations, they used credit cards for everyday items.
"There's no doubt that there has been a kind of freewheeling situation that has not been in the best interest of consumers," said Jones.
As a candidate, Barack Obama has already put for a pro-consumer platform that includes that caps payday loans at 36 percent, reforms bankruptcy laws, bans universal defaults and prohibits charging interest on fees.
Start Reading
Mammarelli advises credit card holders to read their statements.
"Most people don't realize their Sears and Belks cards are so high. Some of them are charging 22 percent interest. It's better to use your Visa card."
But with any card, call and ask for lower interest rates, she advises.
"Now I think how stupid I was not to have done it sooner," Mammarelli said. "All you have to do is ask."
Yes, We Can Lower Credit Card Interest, Fees
Find the phone number on your credit card or the last statement.
Don't threaten, negotiate. Tell the customer service representative you've gotten an offer in the mail to transfer your debt. Or just say you want a lower rate.
If you've been making payments on time, and you've been paying 30 percent, 20 percent, or even 10 percent interest, there should be no trouble negotiating a 2 to 20 percent drop.
If you pay an annual fee, ask that it be dropped, or at least lowered.
Request other fees be dropped, for making late payments, accessing ATM loans, or using those so-called free checks. Some credit cards won't budge, others will rescind fees to keep your business.
Don't tell credit card issuers you're filing for bankruptcy unless you're really in trouble. A long-time valuable customer should project strength.
If you've been unable to pay for months, set up a payment plan. Banks would rather collect $10 a month than nothing at all. But if you're in bankruptcy, be careful, paying one creditor can violate rules.
Offer a lump-sum settlement. Some banks will take 25 percent off the total balance, because they've already collected a mountain of interest from you.
Get it in writing. Ask the customer service agent to send a letter, specifying the deal. Include a promise that the bank won't report the lump-sum settlement as a write-down on a bad debt.
If credit cards are a problem, talk to a credit counseling service. But be careful. Some act like credit counselors, and then charge hundreds of dollars. How to find a reputable service? Talk to your banker.
If you pay the balance every month, who cares what the rate is? Maximize the perks, like airline miles, loyalty points, no annual fees or cash rebates. Do the math to see how you come out ahead.
Source: eHow.com Gary Pinnell can be reached at gpinnell@highlandstoday.com or 863 386-5828 Gary Pinnell can be reached at gpinnell@highlandstoday.com or 863 386-5828 Source: eHow.com
Email
Print
ADVERTISEMENT
Advertisement
TBO.com - Tampa Bay Online Member Agreement | Privacy Statement | Work With Us
