Credit Card Interest Rates

 

It's getting harder & harder to negotiate with credit card companies.  I have 2 credit cards that I'm not proud to say have over $19k in debt on each card.  We've struggled to make our payments but haven't missed them yet, thank goodness.  I've had these 2 cards since college and I've never had such high balances before.  Since I've been laid off 2 years ago, which is the same time my husband had taken over his own business, we've struggled to stay on top of all our expenses.  I regret to say that I didn't cut back the way I should have at the time in order to prevent the debt we've created over the last 2 years. 
Being pregnant when this first happened & then having a 3rd child may not be the height of responsibility to some people, but we are taking our own responsibility and have had very little assistance along the way.  However, at the same time, I know that we will get past our current struggles and I've got the drive to realize our spending habits need to change. 

So yesterday, I was able to negotiate a temporary reduction on 1 credit card from 15.99% to 11.99% over a 6 month period.  This will do 2 things that are currently needed:  1) reduce my current monthly pmt 2) allow my interest to be reduced by 4% in order to make more payments towards the principle.  This was about the third or forth time I've spoken to this credit card company over the last couple months.  Each time previously, I've asked to reduce my interest rate & I've been told that I wasn't eligible.  I asked what my options were & I was told I had no options.  The payment arrangement has been mentioned in the past, but I know this will negatively affect my credit so I always turn down the option.

So what was different this time?  I think a few factors are different:

1. Attitude:  I've been quick to get off the phone or get emotionally upset in the past when speaking to customer service because I feel frustrated that the person on the other side doesn't know what he/she is talking about or is unwilling to explain any questions I ask.  This time, I went into the call expecting that the first 1 or 2 people I spoke with would be unwilling to help.  I pushed to speak to another dept or higher level and kept my cool without getting emotional on the phone.  After all, this is a business for these people.  I realize how emotionally attached I am to
2. Patience:  In the past, I've tried to make these calls in a 5 min window when I'm already multi-tasking.  This makes it harder to negotiate and focus on what needs to be done.  This time I was willing to take the time needed to get information that would assist me with the next time I called or talk through the issue until I felt like I gave a valiant effort.  With patience in the back of my mind, this call only took me a total of 20 minutes....shorter then I expected but my mind was already made up to follow this through
3. Customer Service Agent:  The agent must have some sort of knowledge or willingness to treat the customer as a PERSON rather than a number.  These people take calls all day long so I'm sure my situation doesn't sound much different then everyone else.  There have been calls where I knew in the first 30 seconds that this person didn't know what they are talking about, are going to be unwilling to help & it's a waste of my time to pursue this conversation.  In the past, this is why I've hung up.  When you're talking to someone who can't read past their 'trained script' then arguing or pushing for additional information is a waste of time.  Chances are, this agent has no idea how to help you even if he/she wanted to, so hang up & call later so you don't waste negotiating with someone who doesn't understand what you're asking. 
4. Determination:  There  were 2 people I spoke with in this incident who I knew was not going to help me.  1 was the woman who I was speaking with from the Philippines.  She was very polite and nice, but couldn't say anything past her script.  My request was to speak with someone in the US.  I felt like this would get me back on track with someone would give me better options.  The woman I was transferred to must have been upset that I requested someone in the US, because she was angry and didn't answer any questions.  She said that the woman in the Philippines already answered my questions.  This agent repeatedly asked why I recently used my card if I wanted to lower my payment.  I pushed through and asked to speak to her superior because her questions were irrelevant to why I was requesting to lower my interest. 
5. Escalation:   This is mostly explained under determination, but the key here is when you hit the wall with one agent, ask to speak to another department, supervisor or anyone else who might be willing to listen.  The final agent I spoke with was extremely friendly and understanding of my situation.  It only takes one person to make a difference in the outcome.  She said I've been a loyal customer and she understands the recent economic struggles & life changes I've had going on.  SUCCESS.

Although it's only for 6 months & the interest rate is still 11.99%, it's a start and my hope is to be able to pay down more principle in the next 6 months and renegotiate again come May! 

After this success with credit card #1, I called credit card #2 and with through the same process.  This only took me through 2 agents.  The first told me my a/c is only reviewed every 6 months and it wasn't due for another 2-3 months.  I asked to speak to her supervisor and she said she would pass me through but I needed to understand there was nothing that would be done.  OKAY.  With the 2nd agent, I went through the same discussion but he was quiet and I could tell he was working behind the scenes.  When he started to speak, he told me that the accounts are reviewed every 6 months by a committee and that he had no power to change anything on my current interest rate, but he did put a credit on my card that would be just under $700 reflecting a 25% reduction from the interest I was already charged year to date.  I was very happy with that, but I did push it a little more just to see if I could get a rate reduction.  I used the success I had with credit card #1 to my advantage explaining the success I just had, & also suggested I may transfer my balance to another card where this company won't see any of this interest.  This agent insisted that was the most that could be done.  I felt like the call was successful so I didn't push it any further, although I could have possibly.  SUCCESS #2.

Next steps: I will continue to pay down the balance on all cards, resist the urge to use them to add more debt to them & when I'm able to pay off a card, transfer a large balance to this card so I can reduce the interest rate significantly.  When you start seeing a light at the end of the tunnel, there is temptation to continue abusing your credit & financial situation, but the happy feeling of knowing I accomplished a small feat will push me to strive to pay down this debt.  It's just like when I got an A on a paper/test in school.  I know I'm capable of doing it now, so the bar is raised and I put myself at a higher standard!

Thanks for following!  Share your own experience and support.  I'd love to hear your ideas and suggestions!