Entrepreneur Books' review of "Talk Your Way Out of Credit Card Debt"
Talk Your Way Out of Credit
Card Debt: Phone Calls To Banks That Saved More Than $43,000
In Interest Charges and Fees!
by consumer-advocate Scott Bilker shows people how to
negotiate with credit card companies to reduce or eliminate
fees, lower interest rates, and deal with credit card
disputes and billing errors.
For himself, friends, and
family, Bilker made hundreds of phone calls to credit card
companies in an attempt to achieve a better deal and
evaluate what works and what doesn't when calling credit
The full transcripts of
fifty-two recorded phone calls are given and analyzed in Talk
Your Way Out of Credit Card Debt. The names of Bilker's
friends were changed to protect their identities. Probably
to prevent lawsuits, the names of the banks were changed to
the names of dog breeds. And, the names of the account
representatives and supervisors were changed to insect
names. (Bilker suggests keeping notes and writing down the
name of each person you talk with regarding your account.
That way, if a representative claims he'll lower your
interest rate, but doesn't, you can call back and say,
"Mr. Tumble Bug said he was going to lower my rate
The savings Bilker achieved
were significant. In one phone call, Bilker got the bank to
lower the interest rate from 13.72% to 8.75%, saving
$4,320.00, based upon the existing credit card balance. (An
appendix shows us how to calculate the savings we achieve by
reducing credit card interest rates.)
In another case, Bilker
absolutely couldn't get Mr. Mosquito or Ms. Glowworm at Shih
Tzu bank to lower its rate, but the bank offered a low rate
for transfers from other accounts. So, Bilker promptly
transferred the full balance out of Shih Tzu and then back
again to get the lower transfer rate. Bilker speculates
banks believe people are too lazy to transfer money around
like this, even though the savings in interest paid by doing
so are often in the thousands of dollars.
Bilker says it's crucial to
keep your credit options open so you have bargaining power.
He points out that banks with which you have established
relationships are most likely to give you a good deal. So,
Bilker argues, for people who carry credit card balances,
there's little advantage in closing a no-fee, zero-balance
account. With a phone call, they might lower their rate or
might offer a great rate on transfers. Bilker writes:
"Play all your credit card banks against each other.
Make them fight for your business."
Bilker says credit card
offers received in the mail (that most of us throw away) can
also be used effectively when negotiating with your present
bank. Be prepared to read the offers you have to your
current bank to show that you have options.
Bilker writes: "It's
easy for someone to say 'just call the bank and get the fees
waived,' but actually calling is a different story. Without
training you might risk not knowing exactly what to say in a
highly pressured moment.... The key to success is knowing
who to talk to and exactly what to say."
Bilker notes that Americans
expect a rigid pricing structure and often don't know what
to say or feel intimidated when speaking with bank account
representatives, who often give customers the run-around.
(There's something quite empowering about having your
account representative named Mr. Mud Wasp or Ms. Deer Tick.)
Bilker says consumers should
be prepared when they call, including having a "deal
breaker" handy, which is the action the person will
take if the credit card company fails to make a reasonable
Chapters in Talk Your Way
Out of Credit Card Debt discuss:
Annual Fee Waived
Eliminating Late Payment Fees, Overlimit Fees, and
Cash Advance Fees
Your Interest Rates
Around To Get The Lowest Credit Card Rate
Disputes, Chargebacks, And Errors
For consumers carrying credit
card balances, the chapters about lowering interest rates
and shopping around for the best interest rate are the most
valuable. Bilker writes: "The key to repaying your debt
efficiently, and I mean cheaply, is to keep your finance
charges as low as possible."
In about 70% of the calls,
Bilker got the bank to reduce its interest rate. Bilker
tells us that at a high 19.8% APR, making minimum payments
on $5,000 worth of credit card debt might take 46 years and
cost $24,000 to pay off. Even a small reduction in the
interest rate can save thousands of dollars.
Talk Your Way Out of Credit
Card Debt gives
especially useful advice in dealing with run-around. Through
reading the phone call transcripts, you'll gain experience
in negotiating with a bank. Bilker points out that an
account representative might tell you he/she can't change
your rate. He/she might tell you that the supervisor can't
change it either. It's their best offer. Bilker says you
should ask to speak with the supervisor, anyway, who will
often lower your rate as requested.
Bilker gives some great tips
for dealing with awkward moments. For example, if a
representative asks if you want to close the account (you
don't want to) or leave the rate where it is, Bilker says
you could respond that you don't want to close the account,
but that you plan to transfer the balance to another card
and not use their card unless the rate is later lowered.
Under pressure, unless you're familiar with what might be
said or requested, you might say things that only sound like
whining, which won't get you what you want.
I highly recommend Talk
Your Way Out of Credit Card Debt to anyone who carries a
balance on his or her credit cards or anyone who wants to
gain skill in negotiating with a credit card bank to reduce
interest rates or eliminate fees. Following Bilker's advice
can save thousands of dollars in credit card interest and
fees. Scott Bilker is also the author of the best-selling
book Credit Card And Debt Management.