Talking to your credit card company is intimidating, especially if you’re asking for an interest rate reduction or trying to negotiate down the balance. It doesn’t matter if you’re calling Des Moines or Dubai, those reps sound like they have it all together and you’re just a 3-year-old waiting in line to ride the pony. Knowing these three things will help you put on your big boy pants and ride that horse.
1. It’s all smoke and mirrors – you hold the power.
A credit card company’s worst nightmare is losing a client. They’re not going to tell you that, but multi-millions spent in advertising tells the truth. Credit card companies are in the business of issuing cards, encouraging use and collecting fees from the companies that accept the cards and the consumer. Their worst nightmare is that we’ll all start using cash.
You hold the power because they’ve romanced you and signed you. They have you and they don’t want to let you go. Just try closing an account. The first question you’ll get is, “Why do you want to close your account?”, followed by a litany of reasons you shouldn’t. Your credit card company wants to keep you as a customer and that puts you in the driver’s seat.
2. The first offer is never the best.
You know this instinctively from the schoolyard. You offered to trade the yellow marble for the shooter, but you were willing to throw in the blue marble too if that’s what it took to ink the deal. We forget to apply that maximum to the big institutional companies we deal with as well. If you’re looking to lower an interest rate or negotiate a settlement, the first offer is never the best. The blue marble is play whether they tell you or not.
The key is to keep returning to the well. Talk to different people. Make some noise about other credit card offers you’ve received. Apply your schoolyard philosophy with finesse. Don’t merely demand the blue marble, lower rate or settlement amount, help your credit card company see why they need to give it to you to close the deal and keep you as a customer.
3. In this setting, perfect credit is a liability not an asset.
If you don’t have perfect credit because you’ve had late payments or your credit is maxed out, you likely feel a bit chagrin. It’s not a fact you’re proud of and your credit card company knows that because they students of human behavior. They like to pull that bad credit card and act like they are doing you a favor in even extending your credit – you asking for anything more is really rather greedy, don’t you think? In fact, the credit card company’s favorite, best, top clients are those that struggle using credit. Their big money is made in interest charges and late fees.
In fact, both Sears and JC Penny make more money from their credit cards than sales of merchandise (and that’s true of most major chains). That’s why they push their credit cards every time you make a purchase.
A client with credit dings represents the person a credit card company stands to make the most money from – and thus the zero percent balance transfer was born. Zero percent is a teaser to get you to transfer your balance and then to pay 20%+ when the introductory period is over. Those offers aren’t made only to clients with good credit, they’re made to clients who use credit.
Credit cards are big business in our economy and knowing where you fit in the financial circle of life will give you the confidence and tools you need to make the best deal possible for you and your family.
Emily Chase Smith is an attorney and debt crusher. She wants everyone to live their debt freedom dreams. Emily blogs regularly at www.EmilyChaseSmith.com.