Unfortunately, many of us have had to deal with credit card customer service during the past few months and most of us haven’t had the best experiences.  For starters, we tend to pick up the phone and call customer service after negative things occur, such as an increase in interest rates or a decrease in credit limits.  Oftentimes, we learn of these issues when it is too late to do anything about them and are understandably angry when we pick up the phone.  This can lead to contentious phone calls with unhelpful operators who often lack a full grasp of the English language.

Now, credit card customer service quality varies dramatically from company to company.  In J.D. Power’s 2008 credit card customer satisfaction poll, American Express and Discover ranked at the top of the list, while Capital One, HSBC, and Bank of America were near the bottom.  A key factor for this may be the fact that these companies use a lot of overseas customer service reps.  However, that is only speculation.  Regardless of what credit card company you have, the following steps can help you improve your customer service experience.

1.)  Be Nice!:  This point can’t be stressed enough.  As angry as your credit card company may make you, the representative on the other end of the phone had nothing to do with that.  And, although their powers are limited, customer service reps are the only people who might be able to help you.  Thus it is important to bury your anger and be as polite as possible.  Let the representative know how mad you are for what the company did.  Tell them how horrible their company has been to you.  But by all means be nice.  This will help you gain the support and with that support, you may be able to get a result you like.

2.)  Ask for a U.S. based customer service agent:  I recommend this for two reasons.  First, it helps save jobs at home.  More importantly, though, you’ll probably find it much easier to communicate with someone who is not located 15,000 miles away. 

3.)  Ask for a supervisor:  If things aren’t going well with your call, ask for a supervisor.  In many cases, the representative on the phone has no ability to fix your problem.  Escalating your call to a higher up may get you access to someone who can help.

4.)  Be Persistent:  If you have issues with one customer service rep, hang up, call again, and start from scratch.  And repeat steps 1-3.

Finally, the long term solution to bad credit card customer service:  switch credit card companies.  Before the credit crunch, this was significantly easier than it was today.  Of course, back then, credit card companies weren’t whacking consumers over the head with rate increases and credit limit decreases.  However, if you have good credit, apply for a credit card issued by a company known for good customer service, such as Discover or American Express.  Plus, if you have a balance on your credit card, you can end up saving a few hundred dollars by getting a card that offers a 0% APR on balance transfers.

If you are interested in switching credit card companies and taking advantage of 0% balance transfers, you can calculate your savings using our balance transfer calculator and apply online by choosing an offer from the credit card comparison section of this website.

If you have had a good or, in all likelihood, a bad credit card customer service experience, please share it with our visitors by leaving a comment below.

Visitors often ask what the best balance transfer credit cards are.  In the past, the answer was complicated.  Before the credit crunch/crisis, banks battled one another the offer the best balance transfer deals.  Only one year ago, it was possible to get a balance transfer credit card that offered a 0% APR for a full year and charged no balance transfer fees.  Today, its difficult to get a 0% APR for a full year.

The reasons are pretty obvious to anyone who owns stock in credit card companies like American Express (AXP), Capital One (COF), or Discover (DFS):  these companies are hurting, and the banks they compete against are hurting even more.  Just take a look at Bank of America (BAC) or CitiBank (C). Continue Reading »

(UPDATE April 24, 2008)  While not technically balance transfer rewards, a new card from CitiBank that provides a 0% APR on balance transfers and purchases for 6 months offers a rewards promotion where new cardmembers earn 5,000 Thank You points for making a $50 purchase and another 6,000 points for electing to get paperless statements.  The 11,000 points, if used for giftcards, could be worth about $100.  For more on this offer, click here.

Original Story:  Because visitors of Smart Balance Transfers tend to be credit card savvy, we frequently get questions about whether balance transfers earn rewards.  Unfortunately, the answer to this question is no.  Credit card companies, as a rule, don’t offer balance transfer rewards, as rewards programs are based on spending, which earns them money. Continue Reading »

The Federal Trade Commission, which counts consumer protection among its many mandates, has recent released a credit card debt calculator that yields some disturbing results many consumers may not wish to see.  The calculator, which uses the assumption that you will only pay the minimum monthly payment, is a stark reminder to consumers of how insidious and difficult credit card debt can be.

Using the FTC calculator, I input the average American household credit card debt of approximately $8,000 and used interest rates of 10%, 12%, and 16% to find out how much long it would take, and perhaps most importantly, how much it would cost to pay off that debt by paying only the minimum payment.  My findings were a little unnerving.  Here are the examples:

1. A household with $8,000 in debt on a credit card with a 10% interest rate will spend $1,570 on interest over the course of EIGHT YEARS by paying $400 per month and adding no new credit card charges.
2. A household with $8,000 in debt on credit card with a 12% rate will spend $1,962 over the course of NINE YEARS by paying $400 a month.
3. A household with $8,000 in debt on a card with a 16% APR will spend a shocking $2,852 over close to a DECADE, again paying $400 a month.

Given these frightening figures, including the fact that, as a person reduces their overall balance, the required monthly payment will drop, I think the FTC calculator probably understates the length of time, as well as the interest cost involved.  For example, when the debt amount is cut in half, consumers would be tempted to pay $200 instead of $400.  Doing this could increase the time to repay debt by two or three YEARS, if not more.

In my opinion, the purpose of the calculator is to both educate consumers and make debt repayment seem reasonable.  However, with double digit interest rates, I think it is fair to assume that it will take most households at least a decade to get out of debt.

Fortunately, for the time being, credit cards are still offering 0% interest rates on balance transfers for 1 year ( I emphasize still, as many companies are dramatically pulling back on these offers, and a visitor to site in three months may find that 0% balance transfers only last for 3 or 6 months.)  Nevertheless, 0% balance transfers are still here, and doing a 0% balance transfer can help reduce the time it takes to pay off credit card debt substantially.  In the process, hundreds of dollars can be saved in interest.

Using both the balance transfer calculatorat our website and the FTC’s repayment calculator, we came up with some credit card debt repayment figures that are much easier to digest.  In fact, with 0% balance transfers, getting out of debt can take a fraction of the time it would take without them.  Here are a few examples:

1. If a  household with $8,000 in debt at a 10% rate does a 0% balance transfer and pays their debt down $400/month during that year, they will have $4200 in debt at the end of that year.  Then, using the FTC calculator, it would still take 7 years to repay the debt.  However, this assumes a monthly payment of only $210.  Better yet, the total interest cost will only be $810, more than $700 less than the orignal amount.  That’s not bad at all.
2. The same debt load on a card with a 12% rate would also take 7 years to repay.  However, the payments are only $210 and the total interest cost is $1,012, nearly half of what it would have been.
3. Lastly, an $8000 debt at a 16% interest rate obviously provides the most savings.  How much?  Instead of racking up close to $3,000 in interest expenses, the total cost to pay off the debt is $1,470, or less than 50% of the original amount.

It goes without saying that getting out of credit card debt is never easy.  However, the smart use of balance transfer credit cards that offer 0% interest rates can shave years off the time it takes to repay debt while saving hundreds, even thousands of dollars in interest.

To find out how much you can save with a 0% interest balance transfer, you can use our balance transfer calculator.  If you are ready to start saving, you can apply online for a 0% balance transfer credit card in the appropriate section of this website.

Getting out of credit card debt is always much harder than getting in to it.  However, the smart use of balance transfers can help you get on the right track and limit your interest costs substantially.

Although we’ve been following credit limit cuts for the past few months, recent developments continue to shock us.  At first, the primary victims of credit limit cuts were consumers with marginal credit scores and high credit utilization rates, factors that made these consumers riskier for banks.

Recently, however, we’ve been hearing from consumers with good credit and low credit limit utilization who’ve had their limits cut, oftentimes dramatically.  A common tactic among credit card companies has been to offer consumers ultimatums:  close your account or accept a doubling (or tripling) of your interest rate.  Recently, however, a much more insidious trend has taken hold.

The new trend, which we warned consumers about a few weeks ago, is to cut credit limits to within a few hundred dollars of current balances.  This tactic is the most vulgar and abusive we’ve seen.  In a nutshell, it is a disgusting attempt by credit card companies to charge fees and raise interest rates.  Here’s a scenario that is unfortunately becoming commonplace:

A consumer, we’ll call her Fran, has a $3,000 balance on a credit card with a $10,000 limit and a 720 credit score.  On Monday, Fran gets a letter from her credit card company informing her that her credit limit has been cut to $3,100.  Fran fortunately has a few hundred dollars of available cash, so she puts a check in the mail for $500.  However, Fran has her cell phone bill set to auto-pay, and before that check arrives, her credit card is charged $101, putting her over her credit limit.  Going over the limit leads to Fran being charged a $30 late fee. 

And that’s just the beginning.  Because the terms and conditions of just about every credit card allows the company to raise her interest rate if she defaults (doesn’t pay on time) or goes over the limit, Fran’s interest rate is raised from 12% to 25.99%.

Now, Fran has a monstrous interest rate and no credit available.  And this is just the beginning.  In a few weeks, her credit card company will report to the credit bureaus that she is using 75% of her available credit, as opposed to 30%.  This will cause her credit score to decrease substantially, thus making it difficult for her to refinance her debt with a 0% balance transfer.  If she doesn’t pay off her balance immediately, she will spend over $400 more in interest in just one year at the higher rate.

Fortunately, there is a solution for the Fran’s of the world.  However, it requires fast and decisive action.  Here’s how you can turn a credit card nightmare into a manageable situation:

1. Do a 0% Balance Transfer Immediately:  If you wait until your credit score is updated to reflect your lower credit limit and higher credit utilization, there is a very good chance you may not be approved for a balance transfer credit card.  However, if you act immediately, your credit score will remain where it is, vastly improving your chances of getting approved.  This will not only save you hundreds of dollars in interest, but it will also help your credit score, as you will have more credit available.
2. Do Not Close Your Credit Card Account Unless Forced:  The ultimatums credit card companies are giving consumers are truly sickening.  However, if your credit card company does not threaten to raise your interest rate, keep your credit card open, as closing a credit card account can have a very negative impact on your credit score.
3. Pay Down Your Credit Card Debt:  Although easier said than done, paying down at least a portion of your debt can help you protect your credit score.  For example, if Fran were to trim her credit card debt from $3000 to $1400, her credit utilization would be under 50%.  This is much better than 90%.

Ultimately, upstanding, honest citizens are paying for the mistakes made by irresponsible banks and irresponsible consumers.  Most of the people suffering through credit limit cuts never took out sub-prime mortgages they couldn’t afford or lied on loan applications.  Unfortunately, the risk assessment tools used by credit card companies don’t seem to know the difference between honest, hard working Americans and our dishonest, liar-loan accepting brethren.  The best we can do is utilize the resources available to us to lessen the fallout of other people’s mistakes.

If you’ve fallen victim to a recent credit limit cut or interest rate increase, you can take action by getting a new credit card with a 0% interest rate on balance transfers.  For more information or to apply online, please see the balance transfer offers section of Smart Balance Transfers, where you can compare deals and apply online for approval.

If you want see how your credit score has been effected by a recent credit limit cut, you can find a number of free credit report offers in the appropriate section of our website as well.

During the past six months, we’ve been contacted by tons of consumers who’ve seen their credit limts cut, interest rates raised, or had a deadly combination of both.  These toxic credit card cocktails have been served up by most credit card companies and have hit consumers with good credit, solid credit histories, and high credit scores at random.   At present, the only credit card company that has not recieved a complaint is Discover Card.  Prior to that, Capital One was also on that list.  However, a recent comment from a visitor changed that.  This is what Pam had to say:

“Even though I have had a Capital One credit card for over ten years, paid on time, and paid more than the minimum payment at all times, I received notice from them that my interest rate would be tripling in May. I could accept this or close the account. In selecting to close the account, my attorney tells me that my credit score will be hurt. Is there any action I can take to mitigate the damage soon to be done? Apparently there is no regulation of this industry.”

Pam’s comment is the first word we have heard about this type of behavior at Capital One.  Hopefully, this indicates that Capital One will not be doing this too a lot of consumers.  However, the strategy here is the same we have seen from Chase, Bank of America, HSBC, and others.  Essentially, they give the consumer an offer they can’t refuse:  close your account or pay an absurd interest rate.  Ultimately, anyone who can’t repay their balance quickly has to accept the account closing.  Otherwise, they could see their balances double very quickly.

While it is unfortunate to hear that Capital One is raising interest rates and forcing consumers to close their accounts, this news is not surprising.  However, it might be a little too early to put Capital One on the wall of shame, as this is the first complaint we’ve recieved about them.

However, if you’ve had your credit limit decreased by Capital One, please leave a comment so others can learn of new developments.

Also, if you have your credit limt decreased recently, you may find this article on What to do When Your Credit Limit is Cut useful.

Over the past year, data available to Smart Balance Transfers suggests that balance transfer approval rates have dropped an astounding 40%, with most of the decline occurring since September.   Early data from March seems to indicate further drops in approval rates are on the horizon.

Because Smart Balance Transfers does not collect personally identifiable information from our visitors, we are unable to precisely track approval rates.  However, we have developed a number of metrics to approximate approval rates, and all of these indicators are unfortunately pointing down.

One of the reasons for the large and continued decline in approval rates can obviously be attributed to the fact that credit card companies just don’t want to lend people money at a 0% rate for a full year.  Another factor is the lack of competition.  Many credit card companies have stopped advertising 0% interest rates for 1 year and replaced these deals with 0% rates for 6 months.  American Express, for example, essentially stopped offering low APRs on balance transfers for most of their consumer cards.

I’ve been warning consumers about these trends for months and, unfortunately, my predictions have been very accurate.  Thus, to repeat what has become a mantra for this site, if you carry a balance on your credit card and want to save money with a 0% APR balance transfer, act now while you can.  Otherwise, you may be faced with higher interest rates, credit limit cuts, and very few options to facilitate paying down credit card debt.

For information on current balance transfer deals, please see the 0% balance transfer offers page on Smart Balance Transfers where you can compare offers and apply online for approval.