What happens when you want to negotiate your bills on behalf of your spouse? Is it legal? Can you do it?

One of our readers, Dan, asked this question:

GREAT site in these troubled times! My wife is not the type who would be able to negotiate with her credit card company. She has not worked for over a yr and her $20k cc debt is crippling us with its 20% APR. I would like to step in and negotiate with the CC company as her husband/agent. Will they talk to me??

Thanks,
Dan

If you want to handle the negotiations on behalf of your wife you can certainly do that. Have your wife handy when you begin doing this, because she may need to speak to them personally in order to give that permission.

It really comes down to company policies here, some companies will work with you without even questioning it, but most are going to want verbal permission at a minimum, and possibly even something signed to the effect that she is giving you power of attorney, or at least the right to speak for her regarding these accounts.

When you first contact the creditors (or any time you contact them) just make sure that your wife is nearby so that she can jump on the phone and say “Yes, it’s ok.”

If your intent is to negotiate a basic payment plan, a lowered interest rate, or fee removals, then it should be pretty simple.

If you are negotiating a debt settlement, instead of account modifications, then you are going to want to send certified letters to the creditors. The letter should have her name, account information and signature on it. It should state that she is allowing you to handle the account on her behalf.

Make sure you get a delivery receipt on the letter. If you don’t, I am a little afraid that a debt collection company could come back later and sue you for the balance of the debt they say is “still owed” since you aren’t the owner of the account.

That’s probably just me being paranoid, but you have to take these things seriously. Basic account modifications like fees and interest rates, just give the credit card company a call and see what they need. If it’s debt reduction, go ahead and put everything in writing. Either way you can definitely handle your wife’s accounts for her.

Specific Tips for Negotiating APR’s:

These quick tips will get the best results for you when it’s time to negotiate a new APR.

1. Speak to the “Retention Department” - Every credit card company has one of these departments (though they may call them something else.) The retention department has only one purpose: To keep you from balance transferring your debt. In other words, to keep your business. It is OK to ask to be transferred to them. A sample request would look like this.

   “Hello, I am very unhappy with my current APR, the interest is killing me. If I can’t work something out with you today I am going to balance transfer my debt to a different company. Is there someone there who can help me do this? Who can you connect me with that specializes in this?”

   Occasionally the regular customer service people can help you, but you will get much, much better results if you speak to someone who has a little more authority.

2. Do not close your account - Whether or not you keep your account open matters very little to credit card companies. If you carry a balance, they are going to charge you interest and make money off of you every month whether your account is open or not. Threatening to close your account will not benefit your negotiations. Balance transferring however (especially if you are a customer with an excellent payment record) will mean something to them. Closing your old accounts also hurts your credit score, so it really benefits you to leave the line of credit open in the long run.
3. Understand your options – The most effective weapon you have is your knowledge of the current balance transfer offers out there. What are their competitors offering?

   Here’s a sample negotiation tactic:

   “The Discover® More® Card is currently offering balance transfers at a 0% APR for 12 months, plus you get cash rebates on your purchases. Can you offer me something comparable?”

4. Is it a permanent rate, or an introductory rate? Whatever deal your credit card company offers you, make sure you understand the difference between a permanent interest rate reduction, and a temporary (or introductory rate).

   If you are offered a permanent interest rate reduction, it will most likely end up being around half of what you are currently being charged, but that rate *should* be good for the life of your card. (I say “should” because the credit card companies are regularly altering the terms on their customer’s accounts, especially lately.)

   If it’s an introductory rate, it will last anywhere from three to twelve months, and then it will go back up to a higher interest rate. Just make sure that you ask them to clearly repeat the terms they are going to give you, and then write them down, or mark them on a calendar.

That’s it, that should be all you need. If you get into this and have any other questions, please feel free to come back and ask.

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This entry was posted on Wednesday, March 25th, 2009 at 07:48 and is filed under Credit Cards FAQ. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.