Consolidated Credit Counseling Services, Inc. Offers Tips to Consumers Dealing with Credit Crisis

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Consolidated Credit Counseling Services warns: credit card customers who carry a balance and have an interest rate below 10% will see their interest rates jump into double-digit territory

Current credit card practices place US credit card holders at risk of unexpected, potentially severe price increases which can seriously impair a household's financial stability

Banks need to recuperate money to help recover from the economic crisis, and they are looking to consumers to ease their pain by raising credit card interest rates.

Issuers have been hitting people with less-than-perfect credit for months, but now they're going after a broader range of customers who have good credit records, but carry a balance.

The trend is that any credit card customer who carries a balance and has an interest rate below 10% will see his or her interest rate jump into double-digit territory. Minimum monthly credit card payments will rise, and many consumers just don't have the salary to meet those financial requirements. According to the U.S. Government Accountability Office there are nearly 700 million outstanding credit cards, with U.S. consumers charging $1.8 trillion on their cards.

"People who carry balances will be hit with higher interest rates," says Howard Dvorkin, founder of Consolidated Credit Counseling Services, Inc. "In some cases people will have the opportunity to reject the higher rates but they will have to close the account and stop using the credit card. Until new federal rules go in effect in July 2010 limit rate increases will continue and consumers will have to fend for themselves or get the help from a credit counseling agency who will fight for them," continued Dvorkin.

A survey by Pew Charitable Trusts found that 100 percent of credit cards allowed the issuer to apply payments in a manner which, according to the Federal Reserve, is likely to cause substantial monetary injury to consumers and 93 percent of credit cards allowed the issuer to raise any interest rate at any time by changing the account agreement. Pew's survey looked at all general-purpose consumer credit cards offered online by the largest 12 issuers, which control more than 88 percent of outstanding credit card debt in America.

"Current credit card practices place US credit card holders at risk of unexpected, potentially severe price increases which can seriously impair a household's financial stability," Dvorkin said.

Tips for Credit Card Negotiation

  •     Get organized. Don't waste your creditor's time by not having the proper bills and paperwork in front of you when you make the call.
  •     Lay out in detail what your financial situation is and make certain that you tell the representative that you want to stay in good standings with them. If you have been a long time card holder with them let them know. Be sure to tell them that you have made many payments on time and have been a good customer. Ask them to remove any damaging entries on your credit report so you will be able to negotiate a better rate on the credit card, which in turn will allow you to make your payments on time in the future.
  •     If the representative will not cooperate then ask to speak with a manager or supervisor. Many representatives don't want to take on the work of getting you a better payment plan or lower interest rate. Don't take no for an answer.
  •     If for some reason the supervisor is not being cooperative ask her or him why. If it's because you have been making late payments or stopped paying all together then ask them what you need to do to get the lower interest rate. Explain that you are in financial distress and could really use their assistance.
  •     Let them know that you are making your payments but may be in jeopardy of not being able to make them in the near future. Keep calling every month and don't give up.
  •     If you have a lump sum of money that you can use to pay off a portion of the debt then let your creditor know. If you owe $10,000 and have $5,000 available offer to settle the debt at 50% -- as long as they remove all the negative entries off of your credit report. They may take this deal knowing that it's better to get as much money from you as possible, considering your financial situation is not solid.

For more tips from Consolidated Credit Counseling Services, Inc. go to or call a credit counselor for free no-obligation advice.

About Consolidated Credit Counseling Services, Inc: Consolidated Credit is one of the largest nonprofit organizations providing credit counseling, financial educational and budget assistance to clients throughout the United States. Their mission is to assist families in ending financial crisis and solve money management problems. For more information about Consolidated Credit, visit

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