Authored by Casey Quinn in Credit Card
Published on 01-28-2009
Nothing sounds better than zero percent APR when it comes to credit cards. It is like free money. Spend all you want and then sometime in the far future you just have to repay it for face value. No added interest or fees. Time passes and you realize the balance on your zero percent credit card has become due. What is worse, you may not have the money to pay. Not being able to repay credit cards in the current state of the economy has become more common. As a consumer, you need to take advantage of this trend as the credit card companies are more willing to work with you on your terms.
The first thing you need to remember is that the credit card company makes their money from the interest you pay them. They are banking that you do not pay your total balance each month and will pay interest month after month making them rich. When something happens and you are not able to pay them, you need to be prepared to work with the credit card company. Finding new terms that will work for you and the company is simply a phone call away. Remember, credit card companies just want their money. They do not care if you need a little more time as long as you get them their money. The worst thing you can do, if you are having credit card repayment issues, is simply to ignore them. This will result in them marking up your credit history with delinquent payments. Delinquent payments on a credit report take a while to go away. Act now and avoid this problem by negotiating new terms with your credit card company.
If you are either unhappy with your current credit card terms or in need of changing them, try these two techniques to work new terms.
First technique focuses around competition and personal credit history. If you have been a good standing credit card consumer for a long period of time, credit card companies love you. They do not want to lose you especially to their competitors. Use this to your advantage. Find a competitor offering a better rate and call your credit card company up. Tell them you are thinking about leaving unless they lower your rate or extend your credit limit (or whatever term you are unhappy with). This works believe it or not and they will work with you to find new terms that should make you happy. Remember you pay their checks by taking out credit lines and paying interest. They do not want to lose you.
The second technique is the hard road of honesty. You want to pay but just do not have the money. Call the credit card company and tell them the situation. While it seems at times the credit card company is the enemy, they just want their money back. If you cannot afford the current monthly debt, the credit card company will generally work with you to negotiate terms you can afford. It may require you to pay back more as your rate might go up, but it will keep your credit history safe by being a responsible consumer.