credit cards

Got your rate lowered?

Wednesday, July 8
Posted 2 p.m.

Last week in all of the Bankrate newsletters, we asked readers to tell us if they had tried to negotiate APRs or fees with a credit card issuer. We heard from plenty of readers, many of whom had successfully had interest rates lowered or had fees forgiven. Several people told us that they had gotten the card issuer to give them zero percent interest for six months, provided they pay the minimum and pay on time.

Here's a story from reader Maryann:

I call my credit card companies at least once a month to ask them if I qualify to have a lower interest rate. The customer service department would then check to see if I qualify. For example, I have called American Express in the past when I noticed my interest rate was at 19%. They checked to see if I was eligible for that month for a lower rate, and they lowered it to 9%. So I decided started to call every month, and finally got it lowered down to 6%. I am going to keep trying until it is even lower.

Now that should encourage everyone to give it a try. But I think the key to negotiating is always paying on time and always paying at least the minimum. (Also key to improving your credit score.)

Oh, the minimum! A number of readers have complained about Chase raising the minimum from 2 percent of the balance to 5 percent. This is tough for many people. If you have budgeted a certain amount for monthly credit card payments, you'll have to go back to the drawing board and find somewhere to cut so you can pay more on the credit card debt.

But the credit card issuers are in the same boat: Their budgets were based on predicted income from cardholders paying their credit card bills each month. The recession has blown their budgets, though.

According to an article from Bloomberg News, the balances on delinquent credit card accounts jumped to 6.6 percent in the first quarter of 2009, compared with 5.52 percent in the fourth quarter of 2008. Delinquencies were up to 4.75 percent, 23 basis points higher than the previous quarter.

With unemployment climbing, the jobless will be letting their monthly payments slide. Hence, the rise in credit card delinquencies. So maybe this is why credit card issuers are more willing to make a deal now: It's better to take something rather than get nothing.

That's why Chase raising the minimum payment is confounding. Perhaps they're just trying to rush the inevitable for those cardholders?

But one thing all cardholders need to keep an eye on is fixed-rate cards. Bankrate's market analyst who covers credit cards, Brooks Kelly, just dropped off my weekly report on credit card changes. He said he's found that many issuers are changing their fixed-rate cards to variable rates. This week it's TD Bank switching its platinum business and rewards cards to variables.

Now more than ever, consumers have to read every piece of mail that comes from their credit card companies.

Questions? Comments? E-mail Plastic_Rap@Bankrate.com.

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Product Rate Change Last week
Balance Transfer Cards 15.75%  0.02 15.77%
Cash Back Cards 16.45%  0.03 16.48%
Low Interest Cards 10.96% --0.00 10.96%
 
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