When was the last time you actually read all of that small print when you opened your last credit card account? Chances are that you haven’t. Despite all the financial and legal freedoms we sign over to our creditors, few people truly understand their rights. Whether you’re dealing with bad credit or debt negotiation with your lender, always remember that you’re the boss. Card issuers need you more than you need them and remembering this will give you more power in your debt negotiation efforts.
Truth About Credit Cards
You hold the cards – literally! Whether you’re applying for a new credit card or are in the middle of debt negotiation, the power is in your hands. For instance, letting a credit card provider know that you’re eyeing other options with more favorable terms can get them to modify your terms. Or if a provider seems stubborn about debt negotiation, chances are that they’d rather lower your interest rate than have you file for bankruptcy.
Secrets that the credit card companies don’t tell you include:
- Your interest rates can change at any time. Sure, many providers claim that they will give you a 45 day notice before hiking your interest rates, but they have no legal obligation to do so. A loophole in the CARD Act allows creditors to begin charging higher interest rates 2 weeks after notifying you, provided they give you 45 days to pay the higher interest rates.
- You can negotiate fees. Whether it’s the annual fee or interest rates, you have incredible power with debt negotiation. If your lender is being stubborn, simply mention that you’ve been researching and talking to competitors with better terms. It is more than likely that your credit card company will match or provide a better offer to convince you to stick with them.
- You can raise your limit. When we talk about debt negotiation, we often forget that it’s possible to have your credit limit raised. If you’ve been timely with your payments and have steady employment, you can still manage a credit limit increase even if you have outstanding debt.