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YOUR MONEY: Beware of credit robo call pitches

Ever pick up the phone to hear a recorded voice claim that you can lower your credit card interest rate just by calling this number? The voice sounds so soothing and professional that, frankly, I once even paused and wondered if my credit card co...

Ever pick up the phone to hear a recorded voice claim that you can lower your credit card interest rate just by calling this number?

The voice sounds so soothing and professional that, frankly, I once even paused and wondered if my credit card company was initiating the call for some odd reason.

OK, really, so why would the credit card company offer you a lower rate?

But I'm telling you, this call sounds official.

And if you do have a lot of debt, I'd imagine you could easily be tempted to respond to one of these "robo calls."

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Be warned, though, you could be out hundreds or thousands of dollars upfront if you make that call. It is not as easy as it used to be for many consumers to get a lower rate.

The iffy credit card market makes this a ripe time for rip-offs.

The automated or robo call is not from your credit card company. It's from someone who wants to convince you to pay a few hundred dollars or even thousands of dollars so the company, supposedly, can lower your credit card interest rate.

Tim Burns, public affairs director for the Better Business Bureau Serving Eastern Michigan, said the BBB has received numerous complaints about two Orlando, Fla.-based compa-nies, CSTR Solutions Inc. and Genesis Capital Management, and one Tacoma, Wash.-based company, Mutual Consolidated Savings.

The robo call might start off like this: "There are no problems currently with your account; however it is urgent that you contact us concerning your eligibility for lowering your interest rates to as little as 6.9 percent."

Or the recorded voice might say: "This is our final attempt to reach you since you've not responded to our other calls to discuss your credit card debt."

Burns noted that the telemarketers may claim to be with "Card Services" or "Card Holder Services."

Some consumers complained that it sounded like the credit card company was trying to contact them.

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After the initial recorded message, consumers dial another number to connect to a live person. The live operator starts the sales pitch. The companies promise to save people $2,000 to $25,000 by negotiating lower interest rates with credit card companies.

But consumers who fall for the pitches charge that companies often fail to uphold money-back guarantees. Some consumers said they're not getting refunds when the companies are not successful in getting the consumer a lower rate.

If you want a lower rate -- and think you've got a strong enough credit record to get a lower rate -- call your credit card issuer yourself.

It may not be easy to get anyone to lower your rates--whether you make the call or you pay someone to make it for you.

"The stronger your credit -- the less risk you pose to the issuer -- the more bargaining power you have," said Greg McBride, senior financial analyst at Bankrate.com.

You've got an especially good case if you pay on time, have a job, do not have a high credit card balance and regularly use your cards. As a guideline, the average for variable-rate credit cards is now is a little above 11 percent.

Yet if you regularly carry a high balance, it's going to be far tougher to get that lower rate.

Credit card issuers are well aware of high unemployment rates. Issuers don't want con-sumers who are living on the edge to borrow even more money right now--especially when the consumer could easily lose a job and stop paying the bills.

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"Credit card issuers are very squeamish about risk--they're looking for reasons to say no, not reasons to say yes," McBride said.

These days, your call could lead the issuer to carefully review your credit records. And if the issuer suddenly notices that you were late with last month's car payment, you might see a higher rate, not a lower rate.

"I would caution consumers who are maxed out, or have less than perfect credit, that a phone call could trigger an account review. And that in turn, could result in a lower credit limit and/or higher rate," said Gerri Detweiler, credit adviser for Credit.com in San Fran-cisco.

While in the past you had nothing to lose by threatening to take your business elsewhere, Detweiler said, lately the card issuer might take you up on it.

McBride also warned that the credit card company could review your account and decide: "You're not the same person we fell in love with a couple of years ago when we issued your card."

Snagging a lower credit card rate isn't as easy as it used to be. So you don't want to waste hundreds or thousands of dollars on some robo call, no matter how sincere that recorded voice sounds.

Additional facts

Avoid getting scammed while seeking lower credit card rate

--Do not give personal information, including Social Security, bank or credit card numbers, over the phone to an unknown telemarketer.

--You can research companies at www.bbb.org . Or dig for other complaints by using Google to search the company's name and the word "complaints."

-- Do not pay upfront for someone to negotiate a lower rate for credit cards. When con-sidering any company offering any type of financial assistance, get a written contract that spells out all terms and conditions before signing up or providing credit card or other pay-ment information.

--U.S. consumers can place their home phone number on the federal Do Not Call list by visiting www.donotcall.gov . If the consumer's number is already on the list but the con-sumer continues to receive telemarketing calls--or is receiving robo calls on a cell phone--he or she can use the same Web site to report the incident to the FTC.

--See www.greenpath.com for information on dealing with debt, including a monthly budget planner.

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