Timothy is getting raped with a 24% APR on his credit card and wants help getting it lowered. He writes:
I have a card with one bank (that I am trying my hardest to pay off ASAP) that is 24% APR. It is killing me. A week or two ago, you had an article about a woman who paid off all her credit card debt over the course of 20 months or so. Good for her and it was a good story. One thing about it had me wondering though. She said that she negotiated with her lenders to get lower interest rates on her cards. How do you suggest I do that?
Here’s what:
24%?! Good god man, get the heck out of there. You tell them to lower it or you’re transferring the balance to another card with a better rate and canceling the account. Find a better credit rate at billshrink or bankrate. You may even qualify for an 0% balance transfer.
Here’s what you say:
“I think I’ve been a good customer. I’d like to stay with you, but I really want you to lower the rate on my card. Can you help me?”
If they say no, ask to speak to a supervisor and say the same thing. If they still say no, plug in your research into the following statement:
“____ and ____ and ______ credit card companies are offering me rates of ____ and _____ and _____. Can you match them or do better? Otherwise, I think I might have to take my business there. I really want to pay off this debt, but it’s hard to get ahead with the interest rate you’re charging.”
Skeptical? CBS News approached 10 random shoppers in a mall and had them read the first script. 6 of them were able to get their rates lowered right on the spot.
(Photo: Getty)
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So I just called Chase and spoke with a supervisor after the lady on the phone told me I couldn’t get a lower rate. The supervisor said the same thing, that he couldn’t lower it.
My options: Wait until mid December for my “review” to see if they lower the interest rate.
or
Choose a credit card from bankrate.com and hope for a lower rate.
My credit score is high 600′s/low 700′s and I have about a two year history. I think one late payment over a year ago, always paying $300-$1000 a month, no overlimit.
What’s everyones suggestion?
@Boatski: I’ve called chase a few times to ask for a lower rate and they’ve usually just lowered my rate to their promotional rate after asking a few questions. I didn’t even have to work with a supervisor.
I’d call back again, and tell them that you think your rate is too high. If you get a different person they might work with you.
If not, find a credit card that does 0% for 12 months or so and transfer your balance. I think that’s really all you can do.
@solareclipse2:
I actually spoke with three people, heh. First lady muted the phone on me or something.
I’m not worried about a transfer rate. I only have tuition on it and my school loans are coming in soon. I guess I’ll just do some searching on bankrate.com and pick a new card.
Thanks!
It’s very easy, but you should have done it before you needed it. (Dig your well before your thirsty). I did it last time through the “Secure Mailbox” on Chase.com. “Hi, I was wondering if you had a better card rate, right now I have x.xx% and it’s lower on my other card.”
They lowered it to a FIXED 7.99%, beat that!
You should be able to find something at a lower rate, unless you completely destroyed your credit somehow. Last year, I decided I wanted a credit card for the first time (at age 19, I had no prior credit history). It’s amazing how much the rates vary when you’re looking for a credit card — some said I had to have a secured credit card, some said I could get a very low limit regular credit card with a sky high APR. Some had lower APRs, but somewhat spotty customer service records. I kept looking and eventually found a credit card with 16.9% APR and a $2500 credit limit through USAA. USAA has since lowered the APR to 10.9% and has raised the limit on the card. I know not everyone qualifies for USAA, but I’ve received similar offers from AMEX and Discover. The point is you need to do a few very important things. You need to find one of the “good guys”, like AMEX or USAA or whatever that has very good customer service. You can’t make later payments, ever. You’ve already lost the battle if you do this. You really should be paying the balance off every month. Finally, be willing to negotiate all the way up the corporate ladder to get what you want. The plain, regular CSR is told to reject all requests to lower the APR, simply because everyone asks at this level. Anyone with any sort of financial sense is going to jokingly or otherwise tell the CSR that the APR is too high and ought to be lowered. Be willing to talk to the supervisor and the supervisor’s supervisor and so on.
I’m getting crushed with 25% atm.. I may have to try this method, but I have little faith ugh. I paid the minimum of $50 last month to keep it from going over the limit, then they charged me $150 in interest putting me $100 over the limit + $35 over limit fee, and now I’m late this month, ugh.
how is this different than someone getting into an adjustable-rate home loan they can’t afford?
Chase isn’t nice. I just got a “change in terms” that my Default APR will be going up to 29.99% in January. If I didn’t pay the card off each month, you can bet I’d jump ship before I had to maintain a balance on the damn thing. Only reason I don’t do so now is because I wrack up 2 or so free Southwest flights every year using it.
@cccdude: Chase has all kinds of different interest rates. On the Chase Visa I have, the APR for charges is 10% and they just mailed me a bunch of checks unsolicited, some blank and some made out for different amounts like $8,500 and $5,000 for cash advances with no interest for six months or a year or something like that. (Normal rate for cash advances is a ridiculous 20%.) Of course they went straight into the shredder.
I wonder if you have had problems with your credit. Certainly it is at least possible to get better rates from Chase.
Chase just jacked my Visa credit card rate from 10.49% to 29.99%. But when I looked at the mailed notice in disbelief, and logged into the website to verify this mailing, I was surprised that they had raised my spending limit from $20,000 to $22,000. Is that some kind of consolation prize?
I’ve been their customer for years. I’m a very low risk, have an excellent credit score and credit history, and have always paid my bills before the due date. I’ve carried a balance on my card in the past (a major car repair one year, a $3,000 dental bill the next year for wisdom teeth being pulled under sedation) and always paid it off quickly in a few months. My card has actually had a zero balance for a few months.
I just don’t understand – I have had a good, low fixed rate mortgage with a good bank for 10 years, on time payments. No other loans. I’m in my 30′s and make a decent salary. I haven’t made “risky purchases” as I’ve seen articles on, such as a charge with a credit card at a casino, or rent-to-own center. I just don’t understand how I’m a risk. I’m really responsible. But I need this credit card for emergencies so I don’t have to raid my “real emergency fund” (i.e. my job loss emergency fund of four months living expenses) or my 401K should God forbid, I have an accident or my child has an accident or horrible emergency of some sort that’s not covered by medical or home insurance.
The generic notice I got in the mail says I’m welcome to close my account without penalties if I don’t agree with the new rate. How badly would this hurt my credit score, this being my only card? As I said, I have no balance on the card at the moment, but I never know when I’ll need another major car repair or dental bill, etc.
I’d apply for another card, but I’m wary. My husband applied for a low rate card recently (he too has excellent credit) and sent the application in. When the card came in the mail with a congratulations letter, it was not the low fixed rate he’d applied for. It was a high variable APR rate card. Now he’s “stuck with it” because it would look bad to have opened and closed a card immediately on his credit report, right?
@Julia789: How badly would this hurt my credit score, this being my only card?
I think a better question is – if your good credit still gets your interest rates nearly tripled, how much is it really worth to you to keep your credit score high?
Cancel the cards. Having money in your pocket now is more important than shaving a few percentage points off some hypothetical interest rate in the future. The money you save now, if properly invested, could make you more money than you’d lose on the slightly-higher APR ten years down the line.
@crashfrog: Good point to consider, thanks. I do like to have one card, at least, for those emergencies (for example, when my dog got very sick and the vet bill was a few hundred dollars) but between my husband and I, we can probably just cancel the higher rate card and keep the lower rate one for emergency use.
I just don’t understand how such low-risk customers could suddenly be deemed high risk, with such a long history of on-time payments.
If we’re getting these rates dumped on us after years of a low fixed rate and good relationship, what’s happening to high-risk card holders? Are they the ones getting their credit limits slashed dramatically, as we’ve seen on consumerist before?
When I opened the notice at the mailbox, I half expected to see my credit limit slashed after reading about that in stories online, but was surprised to see they’d upped my APR dramatically instead. Maybe they are OK with my credit, but want to discourage excessive spending with the high rate?
I just don’t get the logic. Why do some get their rates jacked up, while some get their limit slashed instead?
@Julia789: I really don’t think “risk” has anything at all to do with it, anymore. I mean, if you’ll recall, the current economic crisis was, in part, caused by AAA ratings given to risky loans.
I don’t think the business of “assessing risk” actually does much of that, anymore – it’s largely about assessing the greatest possible profit.
The increase in your interest rate almost certainly had nothing to do with any increase in “riskiness” on your part, and almost everything to do with your responsible use of credit denying them substantial profit. They jacked your interest rate to make up for the finance charges they haven’t been able to collect from you.
@Julia789:
Are you sure that they are increasing your rate? They might just be increasing your penalty rate, which they go to if you pay late or go over the limit.
I would keep your card open if there is no annual fee, especially if you’ve had it for over 3 years or so. If your regular interest rate is 20%+, then I’d also open another credit card and use that one as your emergency one.
Credit length history is part of your credit score. Your husband shouldn’t be too affected by quickly opening and closing an account, as long as he’s not applying for a bunch of loans at the same time.
@crashfrog: You may be right – that makes sense. Although I have carried a balance in the past which probably made them a bit of money, I do pay it off completely every Christmas bonus, and usually keep the balance at zero for a few months after.
@Myownheroine: Yeah, it’s weird. My new standard APR is the maximum – even 10 points higher than the new cash-advance APR in the same notice they sent. (Not that I’ve ever used cash advance in my life.) Just weird.
@Julia789: Just cancel them. Closing a card does not trash your credit score. It can affect it, but so can a lot of other factors. Based on your description you should have no problem finding a card from another issuer — just shop around. And consider checking out your own bank first.
“Well..you’ve used up too much of your available credit…”
“but 29%? that’s insane. And this is my ONLY card.”
“The best I can say is try back next month.”
I called for 4 months twice a month. Then i got a new card. When I called to cancel they offered me a lower rate I said “I do not trust your company anymore. Sorry.” This was Chase I cancelled.
Oddly enough, the company I’ve had wonderful experience with..helpful people and polite good service? Discover.
@Ajh: Chase jacked your rate to 29% too? I think they’re doing it to thousands of customers.
@Julia789: They gave me a 9,000 credit limit. An emergency happened. I put 3,000 on it and about 4 months into paying it all in they did that with that excuse.
Calling them up and asking them to lower your APR totally works. I did it a few months ago with two different credit cards. First I should explain some background as to why my rates were so high in the first place. Simply put, last November, I messed up big time with going over the limit on both cards and making the payment late as well. It was a double whammy and both cards increased my rates to around 27%.
Some time passed and I managed to get back under my limit quickly to stop the bleeding. A few months ago, I figured it couldn’t hurt to call them up and see if they would lower my interest rates. It was the best five minutes I’ve ever spent. Discover lowered my rate from 28% all the way down to 4%. Visa lowered my rate only from 25% to 22%, but they told me to call back in a few more months and they’d be able to lower it more.
Let me tell you that this was a big help. I’ve told everyone I know to give it a try. The worst they can say is no and the best they can do is knock a whopping 20%+ off your rate like they did for me. There is no excuse not to give it a shot.
Remember the old usury laws that were in effect in the 50s and 60s. I am afraid that it will be harder and harder for people to get lower rate because of the credit crunch. I am afraid that the massive privet debt ie. credit card dept, will be the next shoe to drop in our current economic debocle.
The October 2007 (pages 12-15) issue of Consumer Reports magazine did a report on credit cards. The best was USAA Federal Savings. Number two was any credit union. Then came Cabela’s, Nordstom, American Express, and Discover. You might look into one of these.
If he is in the situation my brother was in, it had nothing to do with his credit rating. The credit company was fucking him in the ass without his consent. 29%
I told him he better pay it off asap or transfer to a lower rate. My brother’s problem was that he had never been educated on credit cards or personal finance. My parents were of the generation “fantastic plastic” as my mother called it. And once again I find myself saying, there should absolutely be a mandatory class in high school called personal finance. If everyone had a better education on personal finance, I don’t believe we would have as large of a problem as we do today. At least I know I would have never charged 90% of the things I did in my college years on a credit card.
While I understand what you’re getting at…you may want to rethink “Timothy is getting raped” as your opening phrase…
If you routinely overspend on your credit card to the point where its interest rate is an issue, you probably shouldn’t have a credit card.
Assuming you can’t negotiate a lower rate on your own (and it’s just negotiation, like any negotiation — call a couple times and ask, beg, yell, whatever, and see if it gets you anywhere…sometimes it does, sometimes it doesn’t), there are a few options for dealing with credit cards. In order of “Oomph” or severity, they go like this:
1. Debt consolidation company. I recommend the national nonprofit InCharge Debt Solutions, having worked with them and sent people to them before; and emphatically stay AWAY from any that want money up front. These places have pre-existing agreements with some lenders and may be able to lower your balance and/or payments by 10-25%.
2. Attorney who does debt negotiations — a bit pricier, but worth it if you get an experienced attorney; a good one can usually lower your balance and/or payments (by which I mean to include interest) by 40-60%.
3. Bankruptcy. Really only a good option if you a) don’t make a lot of money (so you qualify for a Chapter 7), and b) have a lot of debt, total — I usually don’t recommend it until your debt is up over 40K. Bankruptcy is your “get out free” card, and you can only use it once every eight years, so use it carefully.
and 4. Stop paying the bastards. This will result in collections, phone calls, and after a year or so (assuming none of the collections agencies offer you a good deal, which many times one will), a lawsuit. If that happens, GO TO COURT and argue that the interest rate was stupid and they wouldn’t work with you, and you wanted to pay your debt but they weren’t playing fair. You’ll get nailed, but for a lot less than the amount they were asking for — a typical judgment is half or less the total amount. And then the people suing you have to get your employment and/or banking info (DON’T give it to them!) in order to garnish your wages, which they can only do for 10-20% depending on your state, and if the garnishment is too onerous you can go right back to court and usually get the judge to lower it again. And if things get really bad in the meantime and/or you just can’t do it, a bankruptcy will get rid of the judgment, too.
Credit cards suck and nobody should use them if you ask me, but if you have trouble, remember that they’re WAY less important than your mortgage, your utilities, your necessities and your taxes. Overall, credit card debt can really only damage your credit — they can’t take anything from you, and there’s a lot you can do to lessen the impact of any judgment they get on you (as long as you STAY INVOLVED in the process).
(Sorry my two cents is so long…I do this for a day job.)
@undefined: @xip: Why do people reach for a dictionary every time they want to argue semantics?
I’m sure that Webster’s had plenty of non-PC words in it prior to 1970. That doesn’t mean that it’s ok to call me a guinea-wop-dago.
I had the amazon.com chase card, and after the promotional rate expired they raised it to 29%. I called Chase who said they could not lower it (even though I bank there and have another chase card at a good rate). So something’s screwy there. I told Chase I would transfer the balance and close the account, and the supervisor.
I transferred the balance and closed the account, and Chase customer service said this was happening a lot with the amazon cards. I don’t know what the deal is, but that is one crappy card.
Very simple – call the credit card company, ask so speak with a manager and let them know you are unable to pay your credit card bill and are thinking of filing for bankruptcy. Then offer to pay only the balance WITHOUT ANY FINANCE CHARGES. Tell them this is the best you can do and that otherwise they will get nothing. You will see that they are a lot more accommodating when they risk to get no money at all.
Try transferring to a social lending site like http://www.lendingclub.com or http://www.prosper.com.
I’ve been a reader of four Gawker sites for a very long time and am a very, very large fan who reads almost every post on here. I am also not PC at all and make very crass jokes to my friends, but there is a limit, and even I wouldn’t use the term “Rape” in that context. It is completely unprofessional and seems to be there with no other intent then to boost page views for a site that is unfortunately not getting enough ad revenue. Was it there just to controversial? The fact of the matter is that there is a difference between saying it to your friends and writing it on a serious Consumer helping website that is read by thousands. I don’t like it when my friends say it and I certainly don’t like it when it’s written by someone who is the head editor. The fact that Gawker is pushing it to the side is quite frankly bullshit, and I think feminist sites and Digg should get a hold of this and make an example of it. This and Jesus Diaz’s posts reflect very poorly on some of the great Gawker writing staff. Meg, Owen, Molly, the two Brians and Luke etc. It has no place here, and I wish it were removed and changed to a different word.
Lastly: rape 1 |rÄp|
noun
the crime, committed by a man, of forcing another person to have sexual intercourse with him without their consent and against their will, esp. by the threat or use of violence against them : he denied two charges of attempted rape | he had committed at least two rapes.
• figurative the wanton destruction or spoiling of a place or area : the rape of the Russian countryside.
• poetic/literary the abduction of a woman, esp. for the purpose of having sexual intercourse with her : the Rape of the Sabine Women.
My capital one rate had crept up to almost 22% two years ago. All it took was one phone call to customer service.
I have an idea. Stop spending beyond your means and pay off your credit card every month. I have a 22% APR on my credit card, but I have never had to worry about it because I consistently maintain a $0 balance. Now, if it was in the case of a medica emergency or disaster, disregard, but most people just spend more than they make. Plain and simple.
It doesn’t have to be so complicated as to have a prepared script. Just call your credit card company and tell them you want to cancel. You will be forwarded to retention and that department has the control of changes like lowering your interest. Now be aware that retention is not a free for all for change. They have usually 2 or 3 different offers when a customer wants to cancel and once and a while they’re conditional upon a balance transfer, sometimes there isn’t anything at all they can do at the time either. This may sound silly but I found the best deals generally came out close to superbowl when I worked in retention.
Simply ask your retention agent if you are eligible for a lower interest rate and if they say yes ask for the lowest they can offer. They won’t always offer the absolute lowest first so take in their offer and even if it sounds good make sure to ask them “Is there anything lower?” They are NOT obligated to offer you the lowest rate they see on the screen so if they like you and they are actually able to do something you’ll get a better deal.
Also some companies limit when offers become available on your account. If you take a retention offer you won’t be eligible for another one for 6 months.