Debt Snowflake Challenge #23 – Negotiating with the Credit Card Companies

We have paid off two of our three credit cards we had balances on when we started our gazelle intensity on October 20, 2011.  That is a great feeling.

However, such progress makes the remaining credit card, with what feels like a ginormous balance of just under $11k, feel like a huge burden I can’t wait to get rid of. The 13% APR just makes me angrier.

Looking for Alternatives at the Credit Union

Our credit union has been advertising a credit card with 2.99% APR for 12 months on all balance transfers.  We applied in November and were declined because of our high credit card debt, the fact that my self-employment income was not yet verifiable by a tax return and my husband’s low income.

I applied again this week because we have paid off nearly half of our credit card debt, my income is now verifiable because it showed up on our tax return, and my husband just got a generous raise.

We were declined again.

To add insult to injury, despite the progress we have made on our debt so far, our credit scores have both dropped since November.  Mine used to be 757.  It is now 737.  My husband’s, which was 733, fell all the way to 696.

The credit union did offer us a carrot–a secured loan at 2.99% APR.

The catch?

We would have to put our car up as collateral.  After some consideration, we decided that is not a risk we want to take right now.

Negotiating With the Credit Card Company

We previously tried to negotiate with the credit card company and had very little success.  Still, I tried again.

I explained about the credit union and that I could get 2.99% APR, but the credit union would require I close my credit card account with the credit card company.  (All true, by the way.)  I explained that I have held credit with this company for over 15 years and didn’t want to close my account, but I could no longer justify paying 13% APR.

The response?  An offer to reduce my APR to 11.99% for 6 months.  Seriously?

I asked again and was told that was the best he could do.  I asked to speak to a manager, and the customer service agent said the manager wouldn’t be able to offer anything better.  I asked to speak with the retention department, and the representative suggested I close my account and work with the collections department!  I don’t need to work with collections; I need a lower interest rate, which I told him nicely, even though I wasn’t feeling nice inside.  :)

Politely, but firmly, I once again asked to speak to the manager.  Again the representative tried to stonewall me, but finally agreed to put me through.

The manager gave me 9.99% APR for 6 months and 10,000 rewards points, enough to redeem and put $100 on my credit card balance.

Persistence pays off.  Now, if only I could pay off $11k in 6 months.  :)

Our Progress

I got so gazelle intense in May so I could pay off the remainder of our second credit card that we are in a bit of a financial bind this month.

I had to pay self-employment taxes, so the emergency fund took a hit because I didn’t have all of the money set aside.  Also, we have to come up with money for two of our kids to attend the rest of Japanese summer school.  (We are paid up through mid-July and after that, well, I am not sure where we will find the money.)

Any extra money we make for now is going to Japanese school tuition and resupplying the emergency fund.  Ouch.

In the last 33 weeks since we have gotten gazelle intense, we have “found” $7,099.25 to snowflake!

How did you do this week?  Feel free to link up and share your progress.