YOUR MONEY: Facing a credit card rate hike? Here's how to talk it down

If your credit card company has hiked your rate and you can't pay it off immediately, one option is to call the issuer and ask for a lower rate, particularly if you've been a long-time customer.

"Say, 'I've been a customer for X amount of time, and I'm looking at competitive offers,' " said Bill Hardekopf, chief executive of LowCards.com, a credit-card Web site. " 'I'd like you to roll it back to X rate.' "

Credit-card companies don't want to lose customers because "the acquisition cost is too high," he said.

In 2006 the Chicago Tribune published a script aimed at helping consumers negotiate a lower credit card rate. This reporter successfully used it to bring down the rate on a credit card to 9.99 percent from 24.99 percent.

It goes like this:

You: "Hi. Can you tell me what my current interest rate is?"

Operator: "Your interest rate is X percent."

You: "Hmmm. I'd like you to lower my interest rate now, please."

(Don't say another word until the operator makes a move.)

Operator: "OK, I can lower it to X percent."

You: "That's not enough, but I'll take that for now. Thanks. I'd like to tell your supervisor how helpful you've been. Could you pass me over?"

If you're able to get the supervisor on the line, mention that the operator did indeed help you, but then repeat the script.

In a few months call back and repeat the process.

There is a potential pitfall, according to Bankrate.com: Your FICO score could be dinged if your credit issuer considers that an application for credit and pulls your credit report and score.

"There is a slight risk, but the risk is worth taking if they're increasing your interest rates so high," LowCards.com's Hardekopf said. "If they're going from, say, 10 percent to 17 percent, go for it."

OTHER TIPS

When seeking a lower rate, ask the operator, "How much can you lower my rate without pulling my credit score?"

Looking for credit card options with lower rates? Lowcards.com, Bankrate.com, Credit.com, Indexcreditcards.com and Cardratings.com, are good places to start online research.

If you decide to transfer the balance on one card to another with a better interest rate, be sure to ask about balance transfer fees.

If you decide to pay off your credit card balance, consider going to a credit union for a loan, said Sandy Manisco, marketing vice president for Hawthorne Credit Union.

"A lot of our members are finding the best way to manage their debt is by refinancing their mortgages or consolidating debt with home equity financing," she said.

To find a credit union, visit IBelong.org, she said.